Key Takeaways
- • Ripple, the XRP-linked crypto payments company, is earning financing fees by supplying leveraged exposure to stocks through its prime brokerage unit, Ripple Prime, according to a Wall Street Journal report.
- • Ripple entered the business through its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage, which closed in October 2025.
- • Ripple provides total return swaps that give leveraged stock ETFs amplified exposure to individual stocks such as Nvidia and Sandisk, collecting financing fees from the funds.
- • The move places a crypto firm in a leveraged-ETF financing market that has long been dominated by major banks and securities firms.
- • The business offers a new fee stream but carries risk, because sharp stock moves can leave the financing provider exposed to losses.
Summary
Ripple is expanding into the financing of leveraged stock exchange-traded funds, a market long controlled by large banks and securities firms. According to a Wall Street Journal report, the company's prime brokerage division, Ripple Prime, supplies financing to funds that seek to multiply the daily moves of individual stocks and market indexes.
Ripple gained this capability through its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, which was completed in October 2025. The deal brought Ripple an established operation that clears trades, finances investment positions and processes transactions across stocks, bonds, currencies and digital assets.
The mechanics rely on total return swaps. A fund promising twice the daily return of Nvidia, for example, does not need to buy twice its holdings in Nvidia shares. Instead, it enters a swap contract in which a broker provides the exposure, typically hedging its own risk through stock purchases or other trades, and collects a financing fee from the fund. Ripple now offers these swaps, which give funds amplified exposure to stocks and indexes, including Nvidia and Sandisk.
Ripple's entry is notable because the leveraged ETF segment is growing quickly and has historically generated lucrative fees for large banks. The same economics, however, create exposure for the financing provider. Sharp moves in the underlying stocks can leave a prime broker with losses on its hedging positions, and the financing business therefore depends on effective risk management. The WSJ report does not disclose Ripple's current volume of leveraged ETF financing or the fee revenue it generates from the business.
Ripple gained this capability through its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, which was completed in October 2025. The deal brought Ripple an established operation that clears trades, finances investment positions and processes transactions across stocks, bonds, currencies and digital assets.
The mechanics rely on total return swaps. A fund promising twice the daily return of Nvidia, for example, does not need to buy twice its holdings in Nvidia shares. Instead, it enters a swap contract in which a broker provides the exposure, typically hedging its own risk through stock purchases or other trades, and collects a financing fee from the fund. Ripple now offers these swaps, which give funds amplified exposure to stocks and indexes, including Nvidia and Sandisk.
Ripple's entry is notable because the leveraged ETF segment is growing quickly and has historically generated lucrative fees for large banks. The same economics, however, create exposure for the financing provider. Sharp moves in the underlying stocks can leave a prime broker with losses on its hedging positions, and the financing business therefore depends on effective risk management. The WSJ report does not disclose Ripple's current volume of leveraged ETF financing or the fee revenue it generates from the business.
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