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Ahmed Barakat
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The U.S. leveraged ETF market has 593 funds and more than $256 billion in assets, including XRP, and Ripple Prime is making itself known in the news by entering the financing chain, providing total-return swaps to fund managers. The move tests whether a crypto-origin firm can win business in a balance-sheet-intensive segment long dominated by banks.
The expansion builds on Ripple’s $1.25 billion acquisition of Hidden Road, completed in 2025, after which the prime brokerage business became Ripple Prime. Ripple is now taking the operation deeper into traditional markets, where swap financing can generate recurring fees but also leaves the provider exposed to sharp moves in the assets being financed.
Ripple announced the Hidden Road acquisition in April 2025, describing the platform as a multi-asset provider of clearing, brokerage, and financing. The acquisition’s completed status and the rebrand to Ripple Prime were confirmed in Ripple’s announcement.
Its later expansion into services for Brevan Howard adds a hedge-fund relationship to that institutional push, with Ripple Prime’s brokerage, clearing, and financing services announced on Tuesday, October 6.
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Swap Fees Revenue, And The Risks
Leveraged ETFs use derivatives, including total-return swaps, to magnify the daily performance of a stock or index. A bank or broker provides the swap in return for financing charges and typically hedges its exposure by buying the underlying security.
Morningstar Direct data cited in a Wall Street Journal report put the U.S. total at 593 leveraged ETFs with more than $256 billion in assets. Single-stock funds make up 426 products in that count, a category regulators first approved in 2022.
One reported example shows the fee economics. The Tradr 2X Long SDNK Daily ETF pays Ripple a rate tied to the overnight bank funding rate plus four percentage points; as of Wednesday, October 7, that translated to about 8% of the fund’s assets on an annualized basis.
Financing charges sit on top of management fees and are reflected in a fund’s net asset value. Over longer holding periods, those costs compound alongside the fund’s daily reset mechanics and the underlying market’s path, making sustained leveraged exposure more expensive than a simple multiple of the asset’s long-term return would suggest.
The swap business also carries direct counterparty risk. A sufficiently large one-day drop in an underlying stock could erase a leveraged ETF’s equity, leaving its financing provider exposed to losses; providers manage that risk by hedging through other asset managers or market makers.
Banks have long dominated this segment, but tighter limits on the risk they can take have opened room for nonbank firms. The primary report identifies Jane Street and Clear Street among firms gaining ground.
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Will XRP Benefit From This News?
Ripple Prime is seeking business from additional investment managers, including hedge funds, while its October 6 announcement of brokerage, clearing, and financing services for Brevan Howard offers a concrete example of the broader institutional strategy.
Hidden Road had also expanded into U.S. institutional crypto over-the-counter swaps, cross-margining, and financing after Ripple’s acquisition. Together, those moves show a multi-asset prime brokerage business reaching beyond crypto trading and payments.
Ripple’s institutional relationships also extend into other markets, including custody and tokenization-related partnerships such as the work involving Meritz Securities in South Korea. This helps explain the acquisition strategy, but it should not be mistaken for evidence that XRP underlies or collateralizes these ETF swaps.
For XRP, the news is therefore more of a long-term ecosystem development than a direct bullish price catalyst. Unless Ripple Prime’s expansion creates measurable demand for XRP, increases token utility, or triggers fresh buying interest, the immediate price impact may be limited.
We should, instead, watch XRP’s trading volume, market sentiment, and price action around key resistance levels before treating the announcement as a reason to expect a rally. XRP is trading around $1.41, with little sign of a positive market reaction to the leveraged ETF financing news.
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