Ripple (XRP) Expands Wall Street Push With Leveraged ETF Swap Financing: Report

Leveraged ETFs now manage more than $256 billion in the US, giving Ripple a large market for swap financing. Ripple is moving deeper into Wall Street’s leveraged ETF business, with its prime brokerage arm providing swap financing to funds that use derivatives to amplify bets on stocks and indexes. A recent Wall Street Journal report shows how the crypto company is entering a fee-heavy part of traditional finance where banks have long dominated, while tighter capital rules are creating room for nonbank firms. Ripple Takes Aim at Leveraged ETF Financing Ripple entered the business last year through its $1.25 billion acquisition of Hidden Road, now known as Ripple Prime. The platform is already working with ETF providers and is seeking business from other investment managers, including hedge funds. Additionally, on October 6, Ripple Prime announced its prime brokerage and clearing and financing service for Brevan Howard, which adds yet another hedge fund to the list of clients. Leveraged ETFs use total return swaps and other derivative instruments in order to amplify the daily changes in individual stocks or indexes. The swap is provided by a bank or broker at a cost, and the risk is ...