In a bold move that could reshape the crypto trading landscape, Kraken, one of the leading cryptocurrency exchanges, announced its acquisition of Breakout, a proprietary trading platform, in September 2025. The deal marks Kraken’s first venture into the prop trading arena, a sector traditionally dominated by retail traders and smaller firms. With Kraken’s institutional resources and Breakout’s performance-based funding model, the acquisition promises to elevate the competitive and technological standards of crypto trading.
Institutional Investment Drives Change
Kraken’s foray into proprietary trading isn’t an isolated incident. The acquisition comes on the heels of several strategic moves, including Kraken’s $1.5 billion purchase of NinjaTrader and the acquisition of Capitalise.ai earlier in 2025. This series of deals signals Kraken’s broader ambition to build an all-encompassing trading ecosystem that caters to both retail and institutional traders. As part of the acquisition, Breakout’s evaluation-driven funding model will be integrated into Kraken Pro, helping to identify and reward top traders based on their performance rather than their access to capital.
For Kraken’s co-CEO Arjun Sethi, the deal represents a shift from the traditional finance world, where success often relied on connections rather than skills. “Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself,” he stated. This marks a transition towards a merit-based trading system where talent is rewarded over pedigree.
The crypto prop trading market has been expanding rapidly, with global search interest for “prop trading” spiking by over 5,000% from 2020 to 2025. In fact, analysts estimate that the prop trading market was valued at $5.8 billion in 2024 and could grow to $14.5 billion by 2033, outpacing other fintech sectors. Crypto-based prop trading is leading this surge, with Kraken’s acquisition of Breakout setting the stage for more institutional involvement in the sector.
Breakout, launched in 2023, brought with it a customer base of over 20,000 funded traders. Kraken’s extensive infrastructure, including liquidity and security, will provide these traders with a more robust platform for growth. However, the integration of Breakout’s funding model into Kraken Pro is not just about expansion—it’s also about capitalizing on the evaluation fees and sharing profits with top-performing traders.
The New Prop Trading Landscape
The acquisition has also stirred up competition. For years, FTMO, a Czech-based firm, has been considered the gold standard in prop trading. However, Kraken’s entry into the market introduces a new competitor with deeper resources and a wider user base. FTMO has already responded by expanding its crypto offerings, adding over 30 instruments, and boasting a strong reputation with a 4.8/5 Trustpilot rating.
Additionally, a new wave of crypto-native platforms, like Fondeo.xyz, are integrating artificial intelligence (AI) into the trading experience. Fondeo.xyz focuses on both funding traders and providing AI-driven coaching to improve traders’ psychological and technical performance. Given that only 5-10% of traders typically pass their first evaluation, the integration of AI coaching could provide the edge necessary to help traders succeed in an increasingly competitive market.
The Kraken-Breakout deal represents a pivotal moment for the broader industry, signaling that prop trading is no longer confined to retail traders. As institutional players like Kraken continue to push into this space, the legitimacy of prop trading is expected to rise. This institutionalization of the sector is poised to accelerate further, and Kraken’s moves suggest a potential IPO in the future, though the company has yet to confirm such plans.
As Kraken’s Arjun Sethi put it, “This is how modern capital platforms should work. Transparent, programmable, and open to anyone with an edge.” As the prop trading market grows, traders will have a range of choices, but success will depend on choosing the right platform that offers not just funding but the tools to nurture skill development and long-term success.
