When Kraken announced the acquisition of Breakout in September 2025, it sent a clear signal to the crypto industry: prop trading has arrived. It was the first time that a major crypto exchange directly entered the proprietary trading market. Kraken thus combines its institutional infrastructure with Breakout's evaluation-based funding model.
"With Breakout, we can allocate capital based on proven skills rather than access to capital," said Arjun Sethi, co-CEO of Kraken. "In a world that is rapidly shifting to what you can do rather than who you know, we want to build systems that actually reward performance, not pedigree."
This acquisition shows a broader trend: what started as retail trading has evolved into a sector that now attracts serious institutional attention and a lot of capital.
The numbers behind the hype
The growth of the prop trading industry is extraordinary. According to Google Trends, global searches for 'prop trading' have increased by more than 5,000% between 2020 and 2025. The search term recently reached a historic maximum. This shows the unprecedented popularity and demand for funded trading programs.
Analysts estimate that the prop trading market was valued at $5.8 billion in 2024 and is expected to reach $14.5 billion by 2033. That is an annual growth rate that outpaces most fintech sectors—between December 2015 and April 2024, prop trading grew by 1,264%, while traditional investments grew only by 240% during that period.
The crypto segment of this market is growing even faster. A recent report shows that 90% of the top 20 prop trading companies saw an increase in Google search interest in August 2025, especially among crypto-native companies.
Why big players are paying attention
Kraken's move into prop trading is not an isolated event. The exchange had already acquired NinjaTrader for $1.5 billion and Capitalise.ai in the months leading up to the Breakout deal. This shows that Kraken aims to strategically grow in all phases of retail and professional trading. Some experts even expect these acquisitions to be preparations for a possible Kraken IPO.
The acquisition of Breakout presents an interesting advantage: by directly linking prop trading to Kraken Pro, the exchange can identify and train talented traders early on and generate revenue from evaluation fees and profit sharing. Breakout had already issued more than 20,000 funded accounts since its launch in 2023—these clients now gain access to Kraken's institutional liquidity and infrastructure.
For the prop trading industry, this acquisition is a confirmation. If a regulated, large exchange like Kraken deliberately opts for the funded trader model, it shows that prop trading is more than just a trend among individuals.
The changing competitive landscape
The Kraken-Breakout deal changes the competition in crypto prop trading. Well-known names like FTMO—which has been regarded as the gold standard since 2015—are now facing competition from large exchanges with much more resources and existing users.
FTMO has responded by expanding its crypto offerings. In July 2025, they added 22 new pairs and improved spreads, making more than 30 crypto CFD instruments available. The Czech firm has already helped over one million traders and has a 4.8/5 Trustpilot score—important points in a sector where trust is paramount.
But the acquisition also offers opportunities for platforms that position themselves differently. While exchanges compete on capital and infrastructure, a new group of crypto-native companies is emerging that focuses more on trader development alongside funding.
The next step: AI-integrated trading development
While Kraken's acquisition clearly shows the institutional growth of prop trading, it also points to a gap that innovative platforms are quickly trying to fill. Almost all prop firms—including Breakout—primarily focus on evaluation and providing capital. What they usually do not offer is structural development of traders.
This difference is important because the numbers show that it is difficult. According to the industry, only 5-10% of traders pass their first evaluation, and an even smaller % ultimately receives payment. The bottleneck is not capital, but primarily the psychological and technical shortcoming that causes traders to fail.
Platforms addressing this issue, such as Fondeo.xyz, stand out as examples of what some call the 'next generation' of crypto prop trading. The platform has integrated AI coaching directly into the funded trader experience—with the idea that trading psychology is just as important as strategy. For traders struggling with the traditional model, this combination of capital and talent development is a completely different offering.
This approach fits with a broader trend in AI trading tools. The global market for AI in trading is expected to grow from $24.53 billion in 2025 to $40.47 billion in 2029—a compound annual growth rate of 13.3%. However, while many AI tools focus on analysis or execution, AI coaching in prop trading platforms is a relatively new area that parties like Fondeo.xyz are exploring.
What this means for traders
For novice crypto traders, the Kraken-Breakout acquisition presents both opportunities and points of attention. On one hand, institutional participation brings more reliability, better infrastructure, and likely more stable platforms. Breakout traders now have access to the security, liquidity, and reputation of Kraken—one of the most trusted names in crypto.
On the other hand, institutional prop trading may become more competitive and less forgiving. Kraken clearly states that its Breakout evaluation program is 'deliberately strict,' intended to truly test risk management and discipline before capital is distributed. Most candidates do not pass immediately.
This creates a natural division in the market. Traders who trust their skills will be more likely to choose established names like FTMO or exchange-based options like Breakout. Those who primarily want to improve their skills and seek access to capital—especially in the unique 24/7 crypto market—may find that integrated platforms like Fondeo.xyz align better with their development path.
Outlook: institutionalization of prop trading
Kraken's acquisition of Breakout is unlikely to be the last of its kind. As prop trading reaches a historic peak in search interest and the market grows toward an expected value of $14.5 billion, other major exchanges and fintech companies are likely to consider similar acquisitions.
Industry experts expect more mergers. Small companies with unreliable payouts or questionable practices will struggle to compete with exchange platforms that have more resources. Meanwhile, companies that differentiate themselves—such as through better technology, AI-driven trader development, or a unique market focus—will manage to secure a lasting place.
Google Trends data clearly shows: interest in prop trading continues to grow. For traders, this means more choices, better infrastructure, and more recognition. For the industry, it means that the transition from retail phenomenon to institutional asset class is well underway.
As Sethi of Kraken said: 'This is how modern capital platforms should work. Transparent, programmable, and open to anyone with an advantage.' In 2026, that advantage may not only come from your trading skill but also from choosing the right platform to develop yourself—whether it’s a large institution or an innovative party that focuses on AI-driven trader development.
