Ripple is expanding its institutional services by offering swap financing for leveraged exchange-traded funds through its prime brokerage arm, Ripple Prime. The move marks the crypto firm's entry into a fee-generating business traditionally dominated by banks and securities firms.
Ripple Prime is supplying financing for leveraged stock ETFs and collecting financing fees, including an approximately 8% annualized rate from the Tradr 2X Long SNDK Daily ETF. The unit also collects daily swap spreads from these products.
Market Size and Competition
The U.S. leveraged ETF market is substantial, with 593 leveraged ETFs holding more than $256 billion in assets, according to Morningstar Direct data. This includes 426 funds tracking individual stocks.
Ripple Prime was established after the company acquired Hidden Road for $1.25 billion in 2025. The unit now works with several ETF providers and has stated its intention to extend similar services to hedge funds and other investment managers.
Shift in Market Structure
Traditional banks historically provided most leveraged ETF financing. However, tightening capital and risk requirements have created openings for nonbank firms. Ripple Prime joins competitors including Jane Street and Clear Street in providing these services.
Leveraged ETFs typically deliver two or three times the daily return of an underlying stock or index. Managers obtain that exposure through total-return swaps and similar derivatives.
Ripple Prime recently expanded its partnership with Brevan Howard to offer multi-asset prime brokerage, clearing, and financing services. The unit also launched a delta one business enabling total return swaps on U.S. stocks, indexes, and crypto assets.
According to ETF industry observers, rapid growth in leveraged and highly concentrated ETFs that rely on swaps for exposure is drawing new counterparties into the market as traditional balance sheets become fully utilized.
