Ripple Prime challenges Wall Street with leveraged ETF financing

The expansion centers on Ripple Prime, the brokerage entity formed following the $1.25 billion acquisition of Hidden Road. One notable client, the Tradr 2X Long SNDK Daily ETF, utilizes the service to seek double the daily performance of Sandisk shares. Under this arrangement, the fund pays Ripple a financing rate anchored to the overnight bank funding benchmark plus a four-percentage-point spread. This setup allows the ETF to gain leveraged exposure through total return swaps without the need to purchase the underlying assets directly.

Ripple has aggressively scaled its infrastructure to support these sophisticated institutional operations. In August, the firm secured $275 million through a private placement of senior unsecured notes to bolster its U.S. brokerage activities, adding to a $200 million facility from Neuberger Berman. These capital maneuvers support a client base exceeding 300 institutions, including the recent expansion of a prime brokerage agreement with the $35 billion hedge fund Brevan Howard. While the firm continues to integrate its stablecoin, RLUSD, as collateral, the current ETF financing arrangements operate as a clearing and financing service separate from proprietary trading desks.