When Kraken announced the acquisition of Breakout in September 2025, it was a clear signal to the crypto industry: Prop trading has arrived. For the first time, a major crypto exchange directly entered the realm of proprietary trading, linking Kraken's infrastructure at an institutional level with Breakout's proven valuation model.
"Breakout gives us the opportunity to distribute capital based on proven ability rather than just access to capital," said Arjun Sethi, Co-CEO of Kraken. "In a world that is rapidly shifting from 'Who you know' to 'What you can do,' we want to build systems that reward performance – not background."
This acquisition reflects a larger trend: What began as a phenomenon for private investors has now become a field that attracts serious institutional interest and significant capital.
The numbers behind the boom
The growth of the prop trading industry is truly extraordinary. According to Google Trends, the global search volume for 'prop trading' has increased by more than 5,000 percent between 2020 and 2025. This search term recently reached historic highs, indicating unprecedented interest and strong demand for funded trading programs.
Industry experts estimate that the prop trading market was valued at 5.8 billion USD in 2024 and is expected to rise to 14.5 billion USD by 2033. This is an average annual growth rate that outpaces many areas in the fintech sector. Prop trading grew by 1,264 percent between December 2015 and April 2024, while traditional investment offerings only increased by 240 percent during the same period.
The crypto sector in this market is growing even faster. A current industry outlook shows that 90 percent of the twenty largest prop firms recorded more Google searches in August 2025 alone, with particularly crypto-related companies experiencing strong interest.
That’s why major players are now paying close attention
Kraken did not make the leap into prop trading in isolation. The crypto exchange previously acquired NinjaTrader for 1.5 billion USD and Capitalise.ai in the months leading up to the breakout deal. This shows that Kraken is trying to cover the entire lifecycle of private and professional trading. Industry observers suspect that these acquisitions may prepare for a future Kraken IPO.
Especially with Breakout, a compelling advantage comes into play: Through the direct integration of prop trading into Kraken Pro, Kraken can identify and nurture talented traders. Additionally, revenue is generated through evaluation fees and profit sharing. Breakout has issued over 20,000 funded accounts since its launch in 2023 – these traders now have access to Kraken's institutional resources.
For the prop trading industry, this acquisition is a confirmation. If a regulated crypto exchange with Kraken's reputation adopts the model of funded traders, it becomes clear: Prop trading is no longer a mere appearance for private investors, but has become a permanent market.
This is how the competitive environment is changing
The agreement between Kraken and Breakout has changed the competitive landscape in crypto prop trading. Established players like FTMO – known as the gold standard of the industry since 2015 – are facing competition. It is no longer just other prop firms but large crypto exchanges with more capital and existing user bases.
FTMO responded by expanding its crypto offerings. In July 2025, 22 new trading pairs were added, and the spreads were improved. There are now over 30 crypto CFDs. The Czech-based company has supported more than one million traders and has a 4.8 out of 5 rating on Trustpilot – which counts in an industry where trust is particularly important.
This acquisition also creates opportunities for platforms that position themselves differently. While exchange-backed prop firms promote capital and infrastructure, there are more and more crypto-native providers focusing specifically on trader development and support.
The next level: AI meets trading development
The acquisition by Kraken shows, on one hand, that prop trading is maturing institutionally. However, it also reveals a gap that modern platforms want to fill. Most prop firms – including Breakout – primarily focus on evaluation and capital solutions. What is almost never offered, however, is the targeted development of traders.
This is important because the results in trading are often sobering. Industry data repeatedly shows: Only 5 to 10 percent of traders pass the initial assessment, and even fewer actually receive payouts from funded accounts. The problem is not a lack of capital – it is psychological and technical deficiencies that cause many to fail.
Among the platforms addressing this gap is Fondeo.xyz. Many regard it as an example of the 'next generation' of crypto prop trading. Fondeo.xyz connects artificial intelligence as a coach directly with the funded trading experience. Additionally, the platform recognizes that trading and psychology are interconnected. For traders who struggled with traditional evaluation systems, this creates entirely new value: support and funding in one.
This approach aligns with a general trend in AI trading tools. The global market for AI in trading is expected to grow from 24.53 billion USD in 2025 to 40.47 billion USD by 2029 – that is an annual growth of 13.3 percent. However, most AI solutions focus on analysis or order execution. The combination of AI coaching and prop trading infrastructure, like that of Fondeo.xyz, is relatively new.
What this means for traders
For aspiring crypto traders, the acquisition of Kraken and Breakout presents both opportunities and risks. On one hand, large companies bring more credibility, better technology, and possibly more stable platforms. Breakout traders now enjoy the security standards and liquidity at Kraken level – along with the trust that comes with one of the most recognized names in the crypto industry.
On the other hand, institutional prop trading is likely to become tougher and less forgiving. Kraken itself has stated that the breakout evaluation program is 'intentionally demanding'. It is meant to test risk management and discipline of the strategy before funds are allocated. Most applicants do not succeed on the first attempt.
This leads to a natural segmentation in the market. Talented traders tend to gravitate towards well-known names like FTMO or institutional variants like Breakout. Those looking to build their skills while seeking access to capital – especially in the around-the-clock crypto market – may find platforms like Fondeo.xyz to be a more suitable path.
Proprietary trading becomes institutional: This is what you can expect now
The acquisition of Breakout by Kraken is unlikely to be the last of its kind. As prop trading attracts more interest and the market heads towards a value of 14.5 billion USD, other large exchanges and fintech companies will likely consider similar steps.
Industry observers expect a consolidation. Small firms with uncertain payouts or questionable processes will struggle against platforms backed by exchanges with more capital. Additionally, providers with their own strengths – through better technology, AI support for traders, or specialization in certain markets – will find their own stable niches.
Google Trends data clearly shows: Interest in prop trading is not diminishing. For traders, this means more choices, better technology, and increasing recognition. For the industry, it indicates that the shift from a phenomenon for individuals to a professional asset class is already underway.
As Sethi from Kraken stated: 'This is how modern capital platforms should work. Transparent, programmable, and open to anyone with an advantage.' By 2026, this advantage may not only come from one's own trading, but also from choosing the right platform – whether a large provider or a specialist focusing on AI solutions in trader training.
