Key takeaways Ripple Prime enters a $256 billion leveraged ETF market One ETF reportedly pays roughly 8% annualized financing New Wall Street revenue may not directly benefit XRP Ripple is ex
Ripple is expanding deeper into Wall Street's $256 billion leveraged exchange-traded fund market, where its Ripple Prime division is earning financing fees from investment products linked to stocks and market indexes.
The expansion follows Ripple's $1.25 billion acquisition of Hidden Road in 2025. According to an October 7 Wall Street Journal report, the company is now competing with traditional banks in a financing business that supports leveraged ETFs tracking companies such as Nvidia and Sandisk.
The financial opportunity is substantial, but it raises an important question for XRP holders: how much of Ripple's growing traditional-finance business actually creates demand for XRP?
Ripple Enters $256 Billion ETF Market Dominated by BanksThe U.S. leveraged ETF market includes 593 funds managing more than $256 billion, according to Morningstar Direct figures cited in the report. Of those products, 426 track individual stocks rather than diversified indexes.
These funds often use total return swaps to achieve amplified daily exposure without directly purchasing equivalent amounts of underlying securities.
Ripple Prime provides financing and derivative exposure through its Delta One business, launched in August. Its official announcement confirmed support for swaps referencing U.S. equities, indexes and digital assets.
The company entered this segment after acquiring Hidden Road, gaining infrastructure previously used for institutional clearing, financing and multi-asset trading.
Its expansion adds another dimension to Ripple's existing prime brokerage business, which processes more than $3 trillion in annual clearing activity.
Ripple Could Earn 8% Financing Fees on Leveraged ETF SwapsOne reported transaction illustrates the business model.
The Tradr 2X Long SNDK Daily ETF, which targets twice Sandisk's daily stock performance, reportedly pays Ripple Prime an overnight bank funding rate plus four percentage points.
That produces an annualized financing rate near 8% under prevailing market conditions, separate from the ETF's management fee.
For illustration, an 8% annual financing charge on $100 million of swap exposure would equal approximately $8 million before funding costs, hedging expenses and other obligations.
However, the rate is not equivalent to Ripple's net profit margin, and the company has not disclosed total revenue generated by its leveraged ETF financing operations.
The business also exposes counterparties to potential losses during extreme market volatility, particularly when leveraged positions move sharply against their intended direction.
Does Ripple's Wall Street Expansion Benefit XRP?Ripple Prime's growth does not automatically translate into demand for XRP.
Total return swaps referencing U.S. stocks can be financed and settled through conventional financial infrastructure without requiring XRP transactions.
Ripple's broader institutional strategy includes digital assets, but the company has not disclosed what proportion of its leveraged ETF financing uses XRP or the XRP Ledger.
That distinction is becoming increasingly important as Ripple expands into traditional financial markets while XRP-focused investment products and treasury companies develop separately.
Ripple Prime has already strengthened its financing capacity through a $200 million facility from Neuberger Specialty Finance and a $275 million senior notes offering.
Its August financing announcement identified growing institutional demand as a reason for raising additional capital.
