Ripple Challenges Wall Street Banks in $256 Billion Leveraged ETF Financing Market

In Brief:

Ripple has expanded into Wall Street’s leveraged ETF financing market, competing with major banks through its institutional brokerage division, Ripple Prime. The company now offers swap financing services in a market where traditional financial institutions have historically controlled institutional transactions.

According to a recent Wall Street Journal report, Ripple Prime has entered the financing business for leveraged exchange-traded funds. These investment products use derivatives to increase exposure to individual stocks and broader market indexes.

Data from Morningstar Direct shows that 593 leveraged ETFs trade across the United States, managing more than $256 billion in assets. Of these funds, 426 provide leveraged exposure to individual stocks, representing a substantial segment of the market.

Major banks traditionally finance these products through total return swaps, collecting fees while managing risks associated with underlying assets. Ripple Prime now competes for similar transactions through its expanding institutional brokerage operations.

The Wall Street Journal reported that one leveraged fund pays the overnight bank funding rate plus four percentage points. This financing arrangement currently costs approximately 8%, while the investment fund also charges management fees of around 1%.

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Ripple Prime Expands Swap Financing Following $1.25 Billion Hidden Road Acquisition

Ripple’s entry into Wall Street financing follows its acquisition of global multi-asset prime brokerage firm Hidden Road for $1.25 billion. The company announced the agreement in April 2025 before completing the transaction in October 2025.

Following the acquisition, Ripple rebranded Hidden Road as Ripple Prime, establishing a broader institutional brokerage and financing business. The platform offers services across foreign exchange, derivatives, fixed income, and digital assets.

Additionally, Ripple Prime introduced its Delta One offering in August 2026, expanding its services into institutional total return swap transactions. The offering supports swaps linked to U.S.-listed equities, market indexes, and digital assets.

This expansion placed Ripple Prime in direct competition with established financial institutions that provide financing for leveraged investment products. Banks and brokerage firms have traditionally dominated these transactions through their extensive trading and financing operations.

Ripple also expanded its partnership with alternative asset manager Brevan Howard on October 6, strengthening its relationships with institutional investors. Brevan Howard manages approximately $35 billion in assets, according to the reported figures.

The partnership forms part of Ripple’s broader institutional expansion, which includes prime brokerage, derivatives financing, and digital asset services.

Wall Street Banks Face Growing Competition in Leveraged ETF Financing

The leveraged ETF market provides financing opportunities for institutions offering swap contracts to investment funds seeking amplified market exposure. Morningstar Direct’s figures show that single-stock leveraged ETFs account for 426 of the 593 products trading nationwide.

Financing providers generate revenue through arrangements that charge funds borrowing costs alongside additional fees tied to the transaction. Consequently, institutions offering these services compete for business from investment managers operating leveraged strategies.

Meanwhile, major Wall Street banks retain the largest share of institutional financing despite Ripple Prime’s expansion into the sector. Ripple’s brokerage division has entered the market through its acquired infrastructure and Delta One financing services.

The company’s expansion also connects its institutional operations with traditional financial products beyond cryptocurrency trading and blockchain payments. Its financing activities now include derivatives tied to equities, indexes, and digital assets.

Ripple Prime’s growing presence places the company alongside established banks in the $256 billion leveraged ETF market. Its Hidden Road acquisition and subsequent product launches have provided the infrastructure supporting its entry into institutional swap financing.

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