Cryptocurrency payment company Ripple has expanded into stablecoins, asset custody, and has entered the long-dominated leveraged exchange-traded fund (ETF) swap financing sector, becoming a significant player. According to The Wall Street Journal, leveraged ETF managers achieve target returns through total return swaps and other derivatives, such as amplifying the daily fluctuations of a specific stock or index; banks or brokers sell related contracts and charge fees, then buy stocks or derivatives to hedge their own exposure. According to Morningstar Direct, there are 593 leveraged ETFs in the U.S., managing over $256 billion in assets, of which 426 are single-stock leveraged funds, a category that received regulatory approval in 2022. Ripple entered swap financing after acquiring the prime broker Hidden Road, which caters to crypto hedge funds, and this business, now known as Ripple Prime, is collaborating with several ETF providers and aims to expand to include other investment managers, including hedge funds. On Tuesday, Ripple Prime announced it would provide prime brokerage, clearing, and financing services to hedge fund Brevan Howard. Ripple Prime President Noel Kimmel stated that this is a growing and significant part of the company's business. The report cited that a certain fund pays Ripple at a rate of 4 percentage points above the overnight bank financing rate, which as of Tuesday annualizes to about 8% of the fund's assets; this cost is included in the net asset value of the leveraged fund, separate from the approximately 1% management fee.