XRP-linked Ripple is earning fees financing leveraged stock bets, a business long run by banks
Ripple Prime has begun financing leveraged stock ETFs through total return swaps, using capabilities gained from its $1.25 billion acquisition of Hidden Road. One fund targeting twice Sandisk’s daily movement pays Ripple an overnight funding benchmark plus four percentage points, roughly 8% annually at current rates. The U.S. has 593 leveraged ETFs with more than $256 billion in assets. Banks have traditionally provided this financing, but capital and risk constraints have opened room for nonbank firms. Ripple launched its Delta One business in August and says it had over $1 billion in regulatory net capital. Its expanded agreement with Brevan Howard adds brokerage, clearing and financing services. Ripple has not disclosed revenue from leveraged ETF financing or how much activity involves XRP or the XRP Ledger.
