Author: Claude, Deep潮 TechFlow
DeepChain Summary: Ripple is expanding its business into the hidden profit zones of traditional Wall Street: financing leveraged stock ETFs. By charging retail investors seeking amplified returns an annual financing cost of approximately 8%, Ripple has successfully created a new fiat revenue stream. However, the price of XRP has responded indifferently. For token holders, the core contradiction lies in the fact that the Wall Street spread earned by Ripple as a company is not mechanically translated into genuine demand for XRP.
In the U.S. stock market, investors seeking to amplify daily returns through 2x leveraged ETFs rely on fund issuers borrowing capital from financial institutions to maintain leveraged exposure, incurring ongoing financing costs. This business, long dominated by traditional banks and prime brokers, is now seeing entry from the crypto sector.
CoinDesk, citing The Wall Street Journal, reported that Ripple Prime, Ripple’s institutional brokerage business, has officially entered the leveraged stock ETF financing market. For example, according to the report, the Tradr 2x Long SanDisk fund charges a premium of 4 percentage points above the overnight bank benchmark rate, equating to an approximate annual financing cost of 8% at current market levels.
This means that while retail investors pay a premium for the high volatility of stocks and absorb the losses, Ripple is quietly acting as a liquidity provider in the background, steadily capturing this liquidity premium.
However, the price of XRP has not responded yet. At the time of publication on October 8, XRP was around $1.41, down approximately 3.8% over the past 24 hours and about 6.5% over the past seven days. It closed at around $1.49 on September 30 and was around $1.42 on October 7. There was no noticeable pre-news surge.
A Wall Street business bought for $1.25 billion
Ripple can charge stock funds by leveraging its acquired brokerage business.
In 2025, it spent $1.25 billion to acquire Hidden Road, and after completing the transaction in October, renamed it Ripple Prime. The fund can trade, settle, and finance through this company without needing a separate counterparty for each asset.
The contract used for fund purchases is called a total return swap. The broker provides the fund with returns corresponding to the stock's price movements as agreed, and the fund pays a financing fee; the broker then manages risk by holding stocks or other methods. Retail investors purchasing leveraged ETFs on the exchange are indirectly linked to this institutional contract.
Traders hold funds, while brokers sell leverage. The more capital attracted by stock market trends, the more financing the funds require, creating greater fee opportunities for Ripple.
On August 27 of this year, Ripple officially launched swap services for U.S. equities, indices, and digital assets. On October 6, hedge fund management firm Brevan Howard expanded its collaboration with Ripple, adopting its cross-asset brokerage, clearing, and financing services.
Today's report added specific client and fee details. The license, team, and institutional relationships acquired by Ripple are now generating business.
Figure: ETF investors bear the cost of leverage, with the fund paying financing fees to Ripple Prime. XRP generates usage demand through institutional coin usage, on-chain fees, and account reserves.
But financing companies also need to borrow money.
Ripple Prime has disclosed regulatory net capital exceeding $1 billion, issued $275 million in senior unsecured notes in August, and previously secured $200 million in debt financing. Approximately 8% of client financing fees must cover funding, hedging, and operational costs, leaving only the remainder as profit—thus, whether the business will remain profitable after these changes remains to be seen.
What do XRP holders receive?
According to the current announced arrangements, the proceeds from this financing will be received by Ripple Prime; holding XRP will not entitle you to any corresponding interest distribution, and the business announcement does not propose using these funds to repurchase XRP. The company’s new customers first expand the company’s business.
Ripple outlined how to integrate brokers into its products at the time of the acquisition. The original plan included using the USD stablecoin RLUSD as collateral and migrating part of post-trade processing to the XRP Ledger. Funds could manage collateral using stablecoins, while brokers could reduce settlement and operational costs using the ledger.
For XRP, the relationship between institutional holdings and trading is more direct.
Ripple Prime now offers OTC spot trading for XRP, and institutions can also manage margin alongside their spot positions and other digital asset holdings. If new clients increase their XRP allocation through these services, funds will flow into the token market.
Using ledgers alone generates much lower demand. The standard base fee for regular transactions is 0.00001 XRP, which is destroyed upon payment; creating a new account currently requires reserving 1 XRP. At the standard base fee, one million regular transactions destroy 10 XRP. Low costs facilitate institutional adoption and indicate that large-scale U.S. stock financing cannot be directly translated into equivalent XRP consumption.
The new revenue has not changed the supply arrangement of XRP.
Approximately 63.093 billion XRP are currently in circulation. According to Ripple’s official website snapshot as of June 30, around 32.6 billion XRP remain in escrow, with monthly releases and any unused portions re-escrowed into subsequent months. This stock financing initiative has not disclosed any conditions requiring additional XRP to be locked.
If you buy XRP because of this news, you're betting that Ripple's new customers will eventually become users of XRP. However, holding XRP does not entitle you to interest payments like those from U.S. leveraged ETFs such as SanDisk, nor is it a direct business model for token buybacks.
Or, many established crypto projects are aligning with traditional finance as a current顺应 trend, but the original tokens have not been taken into account with this update.