Ripple is challenging traditional Wall Street banks by expanding its Ripple Prime unit into swap financing for the $256 billion U.S. leveraged ETF market. Backed by its $1.25 billion acquisition of Hidden Road and a newly expanded prime brokerage partnership with $35 billion asset manager Brevan Howard, Ripple Prime is capturing lucrative fee income. Tighter banking regulations have opened the door for nonbank competitors like Ripple, Jane Street, and Clear Street to service these high-demand leveraged funds.
Launch of Delta One swap financing
- ▪Ripple Prime launched its Delta One business in August 2026, offering total return swaps tied to U.S. equities, market indexes, and digital assets
- ▪Ripple's prime brokerage unit, Ripple Prime, has emerged as a provider of swap financing for leveraged exchange-traded funds (ETFs) that amplify bets on individual stocks and market indexes
Tradr SNDK ETF financing
- ▪The Tradr 2X Long SNDK Daily ETF pays Ripple Prime an annualized financing rate of approximately 8%, calculated as the overnight bank funding rate plus four percentage points
- ▪The Tradr 2X Long SNDK Daily ETF aims to deliver twice the daily move of SanDisk stock
Partnership with Brevan Howard
- ▪On October 6, 2026, alternative asset manager Brevan Howard expanded its partnership with Ripple to use Ripple Prime for multi-asset brokerage, clearing, and financing services across its funds
- ▪Brevan Howard, which manages approximately $35 billion in assets, previously established a relationship with Ripple when Brevan Howard-affiliated funds joined Ripple's $500 million investment round in 2025
Ripple Prime financial standing
- ▪Ripple Prime earned a BBB issuer rating from Kroll Bond Rating Agency
- ▪Ripple Prime holds more than $1 billion in regulatory net capital and raised $275 million through a senior debt offering to support its growth
Acquisition of Hidden Road
- ▪Ripple acquired the multi-asset prime brokerage firm Hidden Road for $1.25 billion, announcing the deal in April 2025 and completing it in October 2025 before rebranding it as Ripple Prime
- ▪Ripple's acquisition of Hidden Road provided Ripple with an established platform to clear trades, finance investment positions, and handle transactions across equities, bonds, currencies, and digital assets
Nonbank entry into swap financing
- ▪Tighter capital and risk regulations on traditional banks have created opportunities for nonbank firms, including Ripple Prime, Jane Street, and Clear Street, to enter the leveraged ETF swap financing market
- ▪While traditional Wall Street banks hold the majority of institutional financing, rising demand for leveraged ETFs and lucrative swap fees are encouraging nonbank firms to enter the leveraged ETF space
Debatable claims
- ▪Nonbank entry into leveraged ETF financing increases systemic financial risk
- ▪Regulators should subject nonbank swap providers to the same capital requirements as traditional banks
- ▪Single-stock leveraged ETFs pose unacceptable risks to financial market stability
- ▪Crypto-native firms are reliable enough to act as prime brokers for traditional finance
Story comments
Loading comments…