MarketsRipple is entering the leveraged stock financing arena, traditionally occupied by banks.
Ripple's $1.25 Billion Acquisition of Hidden Road Opens New Market Opportunities
By Shaurya Malwa Oct 8, 2026, 2:17 a.m. EDT 2 min read
Ripple is stepping into the business of financing leveraged exchange-traded funds (ETFs), marking its entrance into a field that has been primarily controlled by major banks and securities firms.
The company’s prime brokerage unit, Ripple Prime, is now providing funding for hedge funds that enable investors to multiply their exposure to daily movements in individual stocks and market indices, as reported by the Wall Street Journal.
This new venture is a result of Ripple's $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, completed in October 2025. This strategic acquisition provides Ripple with an established framework for clearing trades, financing investments, and facilitating transactions across various asset classes, including stocks, bonds, currencies, and digital assets.
For instance, a fund aiming for double the daily return of Nvidia can engage in a total return swap instead of directly purchasing double the amount of Nvidia shares. In this setup, a broker offers the exposure and typically mitigates its risk through stock purchases or alternative trades, while charging a financing fee to the fund.
According to the Journal, the Tradr 2X Long SNDK Daily ETF, which seeks to replicate twice the daily movement of Sandisk shares, compensates Ripple with the overnight bank funding rate—essentially the rate banks pay for overnight borrowing—plus an additional four percentage points. This results in an annualized financing rate of about 8%, based on current rates, which is charged on the swap exposure and is distinct from the ETF's management fee.
Currently, there are 593 leveraged ETFs in the U.S. market, collectively managing over $256 billion, with 426 of those funds focused on individual stocks, as per data from Morningstar Direct.
Historically, banks have been the primary providers of this type of financing. However, stricter capital and risk requirements have created opportunities for non-bank entities like Ripple Prime, Jane Street, and Clear Street.
In August, Ripple also launched its Delta One business, which offers total return swaps linked to U.S. stocks, market indices, and digital assets. At that time, it reported having over $1 billion in regulatory net capital and completed a $275 million senior debt offering to support its growth.
Additionally, Ripple announced a new partnership with hedge fund manager Brevan Howard on Tuesday, enabling Ripple Prime to deliver brokerage, clearing, and financing services across various asset classes.
It’s worth noting that leveraged ETFs reset their exposure daily, meaning significant fluctuations in individual stocks can expose financing firms to risks if a fund's assets do not adequately cover losses.
This new venture offers Ripple a steady stream of fee income linked to stock trading and institutional financing. However, the company has yet to disclose the revenue generated from its leveraged ETF financing or how much of this activity utilizes XRP or the XRP Ledger.