When Kraken announced the acquisition of Breakout in September 2025, this move clearly signaled the arrival of the 'prop trading era' to the cryptocurrency industry. This transaction signifies the first full-scale entry of a major cryptocurrency exchange into the prop trading business. It is an attempt to combine Kraken's infrastructure for institutional investors with Breakout's capability-based funding model.
Kraken co-CEO Arjun Sethi states, 'Breakout provides a mechanism that allocates capital based on proof of skill rather than access to capital itself.' 'As the era shifts rapidly from connections to capabilities, we aim to build a system that fairly evaluates and rewards performance records rather than academic backgrounds or career histories.'
This acquisition reflects a broader trend. Initially centered around individual investors, the trading boom has now evolved into a serious entry point for institutional investors and large-scale capital attraction.
Key figures supporting the boom
The growth of the prop trading industry is remarkable. According to Google Trends, global search volume for 'prop trading' increased by over 5000% between 2020 and 2025. Recent searches have reached all-time highs, indicating a rise in interest and demand for funded trading programs.
Industry analysts estimate that by 2024, the prop trading market will reach $5.8 billion, with expansion predicted to $14.5 billion by 2033. This growth rate will surpass most fintech sectors. From December 2015 to April 2024, prop trading-related searches increased by 1264%, significantly outpacing the 240% increase in searches related to traditional investments.
Within this market, growth in the cryptocurrency segment is even more rapid. Recent surveys indicate that 90% of the top 20 prop firms recorded an increase in Google search interest in August 2025. Notably, there is a significant surge among cryptocurrency-native firms.
Reasons for major entries
Kraken's entry into prop trading is not an isolated move. Prior to the acquisition of Breakout, the exchange had already acquired NinjaTrader for $1.5 billion and took steps to acquire Capitalise.ai, showcasing a strategy targeting the entire lifecycle of both individual and professional traders. Among industry insiders, speculation is growing that these acquisitions are part of Kraken's preparations for an IPO.
The acquisition of Breakout has a clear aim. By integrating prop trading into Kraken Pro, it seeks to discover and nurture talented traders while also securing revenue through evaluation test fees and profit sharing. Since the service's launch in 2023, Breakout has already issued over 20,000 funding accounts, allowing its customer base to utilize Kraken's institutional liquidity and infrastructure.
For the prop trading industry, this acquisition serves as a validation of values. As a well-regarded regulated institution-grade exchange, Kraken's serious investment in the funded model is seen as prop trading evolving beyond the individual investor boom into a more sustainable business.
Evolving competitive landscape
The partnership between Kraken and Breakout has transformed the competitive landscape of cryptocurrency prop trading. Since 2015, existing forces such as FTMO, regarded as a top brand in the industry, face competition not only from other prop firms but also from major exchanges that overwhelm them in user base and capital.
FTMO added 22 cryptocurrency pairs in July 2025 and improved spreads. The handling of crypto CFDs has expanded to over 30. The company has a track record with over a million traders based in the Czech Republic and maintains a Trustpilot rating of 4.8/5, making it credible in a reliability-focused industry.
On the one hand, such acquisitions have brought new opportunities to platforms that are carving their own paths. As prop firms backed by exchanges compete for capital and infrastructure advantages, new cryptocurrency-native companies focused not only on funding but also on trader development are beginning to emerge.
Next outlook: AI-integrated trading development
Kraken's acquisition highlights the maturity of the prop trading industry but also underscores the existence of challenges that new platforms are rapidly trying to address. Most prop firms, including Breakout, focus solely on evaluation and funding, without providing systematic trader development.
This point is very important. According to industry insiders, only about 5–10% of traders pass the initial evaluation test, and the percentage that actually profits from funded accounts is even lower. The bottleneck is not a lack of funds but rather the psychological and technical challenges faced by traders.
Amid these challenges, Fondeo.xyz is viewed as a symbol of next-generation cryptocurrency prop trading. The platform directly integrates AI coaching into the funded trader experience, focusing on the inseparable relationship between trading psychology and trading performance. For traders struggling with traditional models, the fusion of funding and development represents entirely new value.
This approach aligns with the overall trend of AI trading tools. The global market for utilizing AI in trading is expected to expand from $24.53 billion in 2025 to $40.47 billion by 2029, with an anticipated average annual growth rate of 13.3%. However, while most AI tools specialize in execution and analysis, integrating AI coaching into prop firm infrastructure is still an undeveloped area. Entities such as Fondeo.xyz are playing a pioneering role.
Impact on traders
For those aspiring to become prop traders, the partnership between Kraken and Breakout is both an opportunity and a warning. On one hand, the entry of institutional investors will lead to improved reliability, infrastructure standards, and a more robust platform environment. Users of Breakout will enjoy Kraken-level security, institutional liquidity, and the reliability of a major player.
On the other hand, the institution-led prop trading market is becoming increasingly competitive and severe. Kraken made it clear that its Breakout evaluation program is 'deliberately strict,' emphasizing that it rigorously checks risk management and strategy compliance abilities before capital infusion. Most applicants apparently do not pass on their first attempt.
Given this backdrop, a natural segment differentiation is emerging within the market. Confident traders are gravitating toward established options like FTMO or Breakout. Meanwhile, those wanting to secure funding while also improving skills, especially those looking to cope with the 24/7 nature of cryptocurrency markets, may find integrated platforms like Fondeo.xyz more suited.
Future outlook: Institutionalization of prop trading
Kraken's acquisition of Breakout is likely just the beginning of similar movements. Interest in prop trading has reached unprecedented levels, and the market size is projected to expand to $14.5 billion. Consequently, other major exchanges and fintech companies are expected to explore similar developments.
Industry insiders predict that consolidation will continue. Small and medium-sized enterprises with unstable payments or opaque operations will struggle to compete with exchange-based platforms that have superior funding capabilities. On the other hand, businesses that differentiate themselves through excellent technology, AI-driven trader development, and specialization in specific markets will secure a sustainable market.
As indicated by Google Trends data, interest in prop trading has not waned. Traders benefit from expanded options, strengthened foundations, and improved reliability. For the industry as a whole, this signifies an ongoing shift from retail investor trends to institutional investor asset classes.
Mr. Seti from Kraken states, 'Modern capital platforms should be like this. They should be transparent, programmable, and accessible to everyone with an edge.' By 2026, that edge will not just be trading technology; it will depend on which platform one chooses to hone their skills—whether it be a major institutional player or an advanced operator utilizing AI.