According to a recent report by The Wall Street Journal, Ripple now asserts itself as a major competitor to Wall Street banks in a lucrative segment of the financial world that has been largely the domain of the big banks.
The enterprise blockchain firm has become a major player when it comes to the financing of swaps for leveraged exchange-traded funds (ETFs). Such investment funds enable investors to gain more leverage over the price movements of individual stocks or stock market indexes by using derivatives like total return swaps.
Generally, major banks and brokerage houses have been the ones offering up these contracts for a fee while simultaneously hedging their risk to the underlying asset. Now, however, Ripple is trying to get a piece of this lucrative pie with its institutional brokerage arm known as Ripple Prime.
Morningstar Direct data shows there are 593 leveraged ETFs trading in the U.S. at the moment, with assets under management totaling over $256 billion. Out of that total, 426 of them are single-stock leveraged ETFs.
Depending on the deal, the financing fees can be quite lucrative for the providers. Per the WSJ report, one leveraged fund pays out the overnight bank funding rate plus 4% for financing costs. That amounts to about 8% right now. Plus, there is the management fees of the fund (which is around 1%).
Ripple's growth on Wall Street
Ripple's incursion into the traditional financial sector has been backed by some major acquisitions, investments and partnerships with big institutions.
Perhaps one of the largest steps Ripple has taken in this direction was the announcement of the $1.25 billion acquisition of the global multi-asset prime broker Hidden Road in April 2025.
Ripple completed the deal in October 2025, and Hidden Road was rebranded as Ripple Prime. As such, Ripple was able to obtain a ready-made platform for its brokerage, clearing and financing services for FX, derivatives, fixed income and digital assets.
In August 2026, Ripple Prime started its Delta One offering, which gives institutional clients the ability to carry out total return swap transactions for U.S.-listed equities, indexes and digital assets.
Most recently, on Oct. 6, Ripple announced the expansion of its partnership with alternative asset management firm Brevan Howard, which has around $35 billion in assets under management.
Traditional Wall Street banks continue to hold the lion's share of institutional financing. However, Ripple's increasing activity in the leveraged ETF space, as well as derivatives and prime brokerage, shows that the old guard of financial institutions is being contested by an increasingly bold crypto firm.