Ripple is earning fees financing leveraged stock bets, a business long run by banks
The crypto company’s $1.25 billion acquisition of Hidden Road has opened a corner of Wall Street where funds pay to amplify daily moves in stocks such as Nvidia and Sandisk.
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Summary
- Ripple Prime is financing leveraged stock exchange-traded funds, expanding into a market traditionally dominated by major banks and securities firms.
- Ripple entered the business through its $1.25 billion acquisition of Hidden Road and now provides total return swaps that can give funds amplified exposure to stocks and indexes.
- The fast-growing leveraged ETF market offers Ripple a new source of fee income but carries risks because sharp stock moves can leave financing firms exposed to losses.
