Ripple expands institutional reach through ETF swaps

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Ripple builds institutional business

Highlights

Ripple Prime finances leveraged ETF swaps.
U.S. leveraged ETFs hold over $256 billion.
Ripple expands its institutional brokerage business.

The expansion follows Ripple's acquisition of prime brokerage firm Hidden Road in 2025, which gave the company access to institutional trading infrastructure. Ripple Prime is becoming an increasingly significant provider of financing for leveraged ETFs, allowing fund managers to increase exposure through derivatives rather than purchasing additional underlying assets, CoinPedia reports.

Ripple enters leveraged ETF financing

Leveraged ETFs use swaps and other derivatives to target multiples of an asset's daily performance, requiring financing arrangements and collateral management. Ripple Prime supplies capital for these transactions and collects fees, competing with established investment banks and prime brokers. The U.S. market now includes 593 leveraged ETFs managing more than $256 billion, with 426 funds tied to individual stocks, creating a substantial pool of potential clients.

One example is the Tradr 2X Long SNDK Daily ETF, which seeks to deliver twice the daily performance of SanDisk shares. The fund pays Ripple an annualized financing rate of approximately 8%, calculated using the overnight bank funding rate plus four percentage points. This financing charge is separate from the fund's management fee and represents a direct source of revenue for Ripple Prime.

Crypto products create additional demand

Ripple Prime's expansion coincides with the introduction of three-times-leveraged Bitcoin and Ether exchange-traded products on Cboe BZX following regulatory approval. These funds obtain exposure through CME futures and swaps rather than holding the cryptocurrencies directly. Their structure requires financing, collateral, and frequent portfolio adjustments, potentially increasing demand for the services offered by institutional brokers.

Leveraged cryptocurrency products also introduce substantial risk because daily rebalancing and price volatility can produce returns that differ sharply from investors' expectations over longer periods. For financing providers, the opportunity to earn recurring fees comes with responsibility for monitoring collateral, managing counterparty exposure, and maintaining sufficient capital during periods of market stress.

Institutional expansion broadens Ripple revenue

Ripple Prime is also building relationships outside the ETF industry. On October 6, Brevan Howard, an investment manager overseeing approximately $35 billion, agreed to use its brokerage, clearing and financing services. The division reports more than $1 billion in regulatory net capital and has raised $275 million through a senior debt offering to support its expansion.

These developments give Ripple a potential revenue source beyond cryptocurrency payments and trading. However, the company has not disclosed how much income comes from leveraged ETF financing or whether XRP and the XRP Ledger play a significant role in these transactions. The financial impact of its institutional expansion therefore remains difficult to measure, even as its involvement in traditional securities markets increases.

We also reported Meritz Securities taps Ripple for digital asset infrastructure.

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