XRP News: Ripple Targets Wall Street’s $256B ETF Market

The U.S. leveraged ETF industry comprises 593 funds holding more than $256 billion in assets, including products linked to XRP. Ripple Prime is entering the spotlight by supplying total-return swap financing to fund managers, positioning itself within a market traditionally dominated by major banks. The expansion will test whether a company originating in the cryptocurrency sector can compete in a capital-intensive financial services business.

The move builds on Ripple’s $1.25 billion acquisition of Hidden Road, which was completed in 2025 and subsequently rebranded as Ripple Prime. The company is now extending its prime brokerage operations further into traditional financial markets, where swap financing can produce recurring revenue but also exposes providers to substantial losses during sharp market movements.

Ripple announced its acquisition of Hidden Road in April 2025, describing the platform as a multi-asset provider of brokerage, clearing, and financing services. Ripple later confirmed the completion of the transaction and the transition to the Ripple Prime brand.

The company’s expansion into services for Brevan Howard represents another step in its institutional growth strategy. On October 6, Ripple Prime announced that it would provide the hedge fund with brokerage, clearing, and financing services.

Swap Financing: Revenue Opportunities and Risks

Leveraged ETFs use derivatives, including total-return swaps, to amplify the daily performance of stocks or market indexes. In these arrangements, a bank or brokerage firm supplies the swap financing in exchange for fees and generally hedges its market exposure by purchasing the underlying asset.

According to Morningstar Direct data cited by The Wall Street Journal, the U.S. market includes 593 leveraged ETFs with more than $256 billion in assets. Single-stock leveraged funds account for 426 of these products, a category that regulators first approved in 2022.

One example illustrates the potential revenue from this business. The Tradr 2X Long SDNK Daily ETF pays Ripple a financing rate linked to the overnight bank funding rate plus four percentage points. As of October 7, this arrangement translated into an annualized financing cost of approximately 8% of the fund’s assets.

These financing expenses are charged in addition to management fees and are reflected in a fund’s net asset value. Over extended holding periods, financing costs accumulate alongside daily portfolio resets and fluctuations in the underlying asset. Consequently, maintaining leveraged exposure can become considerably more expensive than simply multiplying the asset’s long-term return.

Swap financing also introduces counterparty risk. A sufficiently severe one-day decline in an underlying stock can wipe out the equity supporting a leveraged ETF, potentially exposing its financing provider to losses. Providers seek to limit this exposure by hedging positions through other investment managers or market makers.

Although major banks have traditionally dominated this market, restrictions on their risk-taking activities have created opportunities for nonbank competitors. The report identifies Jane Street and Clear Street as firms that have expanded their presence in the sector.

Will Ripple’s Expansion Benefit XRP?

Ripple Prime is pursuing additional institutional clients, including hedge funds, as it broadens its presence in traditional financial services. Its October 6 announcement concerning brokerage, clearing, and financing services for Brevan Howard provides a concrete example of this expansion.

Following Ripple’s acquisition, Hidden Road also expanded its U.S. institutional cryptocurrency operations, including over-the-counter swaps, cross-margining, and financing. Together, these developments demonstrate how Ripple is building a multi-asset prime brokerage business that extends beyond cryptocurrency trading and payment services.

Ripple’s institutional strategy also includes relationships in other markets, particularly custody and tokenization initiatives, such as its work involving South Korea’s Meritz Securities. These developments help explain the company’s broader acquisition strategy, but they do not establish that XRP is being used as collateral for, or is directly involved in, the leveraged ETF swaps.

For XRP holders, the expansion represents a potential long-term development for Ripple’s institutional ecosystem rather than an immediate bullish catalyst. Unless the growth of Ripple Prime generates measurable demand for XRP, expands the token’s utility, or attracts additional investors, its direct effect on the token’s price may remain limited.

Investors should therefore monitor XRP’s trading volume, market sentiment, and price behavior around key resistance levels before interpreting the announcement as a signal of an impending rally. XRP was trading near $1.41, with little indication of a positive market response to the leveraged ETF financing development.

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