Ripple Becomes a Competitor to Wall Street Banks in ETF Financing

According to a recent report by The Wall Street Journal, Ripple claims to be emerging as a major competitor to Wall Street banks in financing leveraged exchange-traded funds (ETFs). The blockchain company has taken a significant position in financing swaps for leveraged ETFs, providing investors with the opportunity to gain greater returns from price fluctuations of individual stocks or indices. Typically, such contracts are offered by large banks and brokerage firms for a certain fee, while simultaneously hedging their risks regarding the underlying asset. Now, Ripple aims to capture a share of this lucrative market through its institutional brokerage division, Ripple Prime.

Currently, there are 593 leveraged ETFs traded in the US with total assets under management exceeding $256 billion. Out of this number, 426 funds are leveraged ETFs on individual stocks. Depending on the deal, financing can be quite profitable for providers. One leveraged fund pays the overnight bank funding rate plus 4% as financing costs, which currently amounts to about 8%. Additionally, there are also fund management fees, which are around 1%. Ripple's growth on Wall Street is supported by several major acquisitions, investments, and partnerships with large institutions. Perhaps one of Ripple's most significant moves was the acquisition of global multi-asset broker Hidden Road for $1.25 billion in April 2025. The deal was completed in October 2025, and Hidden Road was rebranded as Ripple Prime. This provided Ripple with a ready platform for its brokerage, clearing, and financial services in currency operations, derivatives, fixed income, and digital assets.

In August 2026, Ripple Prime launched its Delta One offering, allowing institutional clients to conduct total return swap transactions on stocks, indices, and digital assets listed in the US. Most recently, on October 6, Ripple announced the expansion of its partnership with alternative investment company Brevan Howard, which manages assets worth approximately $35 billion. Traditional Wall Street banks continue to hold the lion's share of institutional financing, but Ripple's growing activity in leveraged ETFs, as well as derivatives and brokerage services, shows that old financial institutions are facing competition from an increasingly bold crypto company.