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Ripple is providing swap financing to leveraged ETFs, marking its deeper entry into the financial landscape of Wall Street.
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The company is generating financing fees, including an annualized financing rate of around 8% from the Tradr 2X Long SNDK Daily ETF.
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Stricter capital and risk standards have opened the door for nonbank entities like Ripple Prime to enter this sector.
In significant XRP news, Ripple is stepping into the leveraged exchange-traded funds (ETFs) financing sphere, traditionally a sector dominated by banking institutions. Leveraged ETF financing presents a profitable opportunity that Ripple aims to capitalize on.
Ripple Emerges as a Key Player in Leveraged ETFs Financing Industry
Through its brokerage division, Ripple Prime, the company is positioning itself as a formidable competitor on Wall Street, targeting the lucrative leveraged ETF financing sector, as reported by The Wall Street Journal on October 8. Although swap financing may not draw as much public intrigue as a major IPO or partnership, it remains a significant segment of Wall Street’s financial landscape.
This advancement is another facet of Ripple’s growth beyond its core areas, including cross-border transactions and institutional market infrastructure.
Ripple Prime is facilitating financing for leveraged stock ETFs, earning considerable fees, including an estimated 8% annualized financing rate from the Tradr 2X Long SNDK Daily ETF. Furthermore, the firm is capturing daily swap spreads from products that tend to underperform their benchmarks for holders who keep them for longer than a trading session.
According to data from Morningstar Direct, there are 593 leveraged ETFs in the U.S. market, accumulating over $256 billion in assets. This includes 426 funds that track specific stocks, as detailed by Morningstar Direct.
Ripple offers this service through Ripple Prime, which was established following its acquisition of Hidden Road for $1.25 billion in 2025. The unit collaborates with multiple ETF providers and aims to extend similar financial services to various other investment managers, including hedge funds.
Rise of Non-Banks in the Financing Sector due to Stricter Risk Guidelines
Previously, banks dominated this financing landscape. However, increasing capital and risk mandates have allowed for the rise of nonbank entities, including Ripple Prime, Jane Street, and Clear Street.
As reported by CoinGape, Ripple Prime recently initiated its delta one operations targeting institutions, enabling total return swaps on U.S. stocks, indices, and crypto assets. This signifies a key milestone for the XRP community as the company ventures into equity markets.
Leveraged ETFs aim to provide a multiple of the daily returns of a stock or index, often two or three times. Fund managers typically achieve this exposure through total-return swaps and similar financial derivatives.