Ripple is expanding its operations into traditional financial markets. According to the Wall Street Journal (WSJ), Ripple is now making its way onto Wall Street. Ripple is emerging as a new p
Ripple is expanding its operations into traditional financial markets.
According to the Wall Street Journal (WSJ), Ripple is now making its way onto Wall Street. Ripple is emerging as a new player in the leveraged ETF funding market, which has long been dominated by Wall Street banks.
The news report stated that Ripple Prime provides funding for leveraged ETFs that track the daily returns of individual stocks and major indices multiples of their respective value.
At this point, Ripple Prime generates revenue by providing financial contracts to ETF managers who can track stock returns in multiples, and charging them fees in return.
The WSJ article cited Ripple’s funding of the Tradr 2X Long SNDK Daily ETF as an example. It noted that the SanDisk 2x leveraged ETF paid Ripple approximately 8% annually. However, Ripple has not yet disclosed the amount of revenue it receives from leveraged ETF funding or the extent to which XRP and XRP Ledger are used in these transactions.
The size of the leveraged ETF market in the US also reveals why Ripple is focusing on this area. According to Morningstar Direct data, which the WSJ report cites, 593 leveraged ETFs in the country manage over $256 billion in assets.
It was also noted that banks’ limited scope for action in certain areas due to capital and risk regulations has created new opportunities for financial companies like Ripple Prime.
Ripple has also expanded its relationship with hedge fund Brevan Howard, beginning to offer prime brokerage, clearing, and financing services across multiple asset classes. These moves are interpreted as Ripple preparing to take on a larger role in the institutional infrastructure of traditional finance, extending beyond the crypto market.
*This is not investment advice.
Continue Reading: Ripple Moves from Crypto to Wall Street: Its New Move Revealed! All Eyes Turn to XRP! Here Are the Details
