Ripple is moving into bank territory with leveraged stock ETF financing

The shift into TradFi

Ripple is officially leveling up. The crypto giant is expanding Ripple Prime—its prime brokerage division—into the business of financing leveraged stock ETFs. This is a massive move because this sector has historically been the playground of major banks and traditional securities firms.

So, how are they doing it? It comes down to their October 2025 acquisition of Hidden Road for $1.25 billion. That deal gave them the infrastructure to clear trades and finance positions across everything from stocks and bonds to crypto. In August, they launched a "Delta One" business that lets them offer total return swaps tied to U.S. stocks and indexes.

How it works

Think of it this way: instead of an ETF actually buying up double the amount of Nvidia shares to chase those 2X returns, they enter a total return swap. The broker (in this case, Ripple) provides the exposure. The fund pays a fee, typically the overnight bank funding rate plus 4%. At current rates, that’s sitting around an 8% annualized financing charge.

With 593 leveraged ETFs in the U.S. market holding over $256 billion, there’s a lot of potential here. Banks have been pulling back due to tighter capital requirements, which is exactly why players like Ripple, Jane Street, and Clear Street are stepping in to grab the bags. They also just leveled up their partnership with hedge fund manager Brevan Howard to provide broader brokerage services.

Why it matters

Real talk: this is a business move for fee income. Ripple isn't spilling the tea on exactly how much cash this is generating or if they're using XRP for these trades, so don't assume this is a moon-shot signal for the token. It's also worth remembering that leveraged ETFs reset daily, and if a stock goes wild, the firms financing them can be left holding the bag if things go south. It’s high-stakes institutional finance, not financial advice. Stay informed and don't go yoloing into stuff you don't understand.