When Kraken announced its acquisition of Breakout in September 2025, the move reverberated through the cryptocurrency world. For the first time, a major crypto exchange was stepping directly into the proprietary trading space—a sector that, until recently, was mostly the playground of retail traders and niche firms. Now, with Kraken’s institutional muscle and Breakout’s evaluation-driven funding model, the industry is facing a new era of competition and innovation.
Arjun Sethi, Kraken’s co-CEO, captured the spirit behind the deal, stating, “Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself.” According to Sethi, the old world of finance—where connections and pedigree often trumped ability—is giving way to a meritocracy. “In a world that is rapidly shifting from who you know to what you know, we want to build systems that reward demonstrated performance, not pedigree.”
This acquisition is more than just a one-off play. It’s part of a sweeping transformation in the prop trading landscape—a sector that has exploded in popularity and value over the last five years. According to Google Trends data, global search volume for “prop trading” surged over 5,000% between 2020 and 2025, reaching historical highs and reflecting a massive uptick in interest, especially for funded trading programs. Industry analysts estimate the prop trading market was worth $5.8 billion in 2024, with projections soaring to $14.5 billion by 2033. That’s a compound annual growth rate that leaves most fintech segments in the dust. For context, prop trading grew by a staggering 1,264% between December 2015 and April 2024, compared to just 240% growth for traditional investing searches in the same period.
The crypto segment of prop trading is leading the charge. A recent industry report highlighted that in August 2025, 90% of the top 20 prop trading firms saw an increase in Google search interest, with crypto-native outfits drawing particularly strong attention. As Kraken’s acquisition of Breakout demonstrates, institutional players are no longer content to watch from the sidelines—they’re buying in, and in a big way.
Kraken’s foray into prop trading didn’t happen in isolation. The company had already made waves with its $1.5 billion purchase of NinjaTrader and the acquisition of Capitalise.ai earlier in 2025. These moves suggest a calculated strategy: Kraken is building an end-to-end trading ecosystem, one that spans retail and professional markets alike. Industry observers have speculated that this flurry of activity could be setting the stage for a Kraken IPO, though the company has yet to confirm any such plans.
Breakout, meanwhile, brought a ready-made customer base to the table. Since its 2023 launch, the platform had issued over 20,000 funded accounts. Now, those traders have access to Kraken’s institutional-grade liquidity, security, and infrastructure. For Kraken, integrating Breakout’s evaluation-based funding model into Kraken Pro means more than just expanding its product suite—it’s about identifying and nurturing trading talent, generating revenue through evaluation fees, and sharing profits with top performers.
For the broader prop trading industry, Kraken’s move is a watershed moment. As reported by industry analysts, when a regulated, well-respected exchange like Kraken bets on the funded trader model, it lends legitimacy to a sector that’s often been viewed with skepticism. The message is clear: prop trading is no longer just a retail phenomenon—it’s becoming a durable, institutional asset class.
The competitive landscape is shifting rapidly. FTMO, a Czech-based prop trading firm that’s been considered the gold standard since 2015, now faces competition from exchanges with deeper pockets and established user bases. FTMO has responded by expanding its crypto offerings, adding 22 new pairs and improving spreads in July 2025, bringing its total to over 30 crypto CFD instruments. The firm boasts over one million traders served and a 4.8/5 Trustpilot rating—credibility that carries weight in an industry where trust is paramount.
But it’s not just the giants making moves. A new generation of crypto-native platforms is emerging, focusing not only on funding traders but also on helping them develop their skills. One standout is Fondeo.xyz, which has integrated AI coaching directly into the funded trader experience. This approach recognizes that the biggest hurdle for most traders isn’t access to capital—it’s overcoming the psychological and technical barriers that lead to failure.
The data is sobering: only 5-10% of traders pass their first evaluation in prop trading, and even fewer go on to receive payouts from funded accounts. The bottleneck is rarely about money; it’s about mastering risk management, discipline, and strategy. By offering personalized AI coaching, platforms like Fondeo.xyz aim to boost traders’ decision-making and mental resilience, giving them a better shot at success. As noted in recent industry reports, the global market for AI in trading is expected to balloon from $24.53 billion in 2025 to $40.47 billion by 2029, growing at a 13.3% annual rate. While most AI tools focus on execution or analysis, Fondeo.xyz’s model—integrating AI-driven development into the prop trading infrastructure—is breaking new ground.
For aspiring crypto traders, the Kraken-Breakout deal brings both promise and challenge. On the upside, institutional involvement means better infrastructure, more robust security, and the kind of credibility that can attract serious talent. Breakout traders now benefit from Kraken’s rigorous standards and deep liquidity. But there’s a catch: the evaluation process is intentionally tough. Kraken has made it clear that Breakout’s program is designed to verify real skill, not just luck. Most applicants fail on their first try, and only the most disciplined and strategic traders make the cut.
This has created a natural segmentation in the market. Traders who are confident in their abilities may gravitate toward established names like FTMO or Kraken’s Breakout, chasing the prestige and resources these platforms offer. Others, especially those looking to build their skills while accessing capital, might find more value in platforms like Fondeo.xyz, where trader development is as important as funding.
Looking ahead, industry experts expect the institutionalization of prop trading to accelerate. As the market expands toward its projected $14.5 billion valuation, more major exchanges and fintech firms are likely to jump in. The sector is ripe for consolidation: smaller firms with spotty payouts or questionable practices will struggle to compete against exchange-backed platforms with superior resources. At the same time, differentiated players—those leveraging technology, AI-driven coaching, or specialized market focus—are carving out sustainable niches.
The numbers don’t lie: interest in prop trading is at an all-time high, and the momentum shows no signs of slowing. For traders, this means more choices, better tools, and a rapidly evolving landscape. For the industry, it’s a sign that prop trading has firmly crossed over from a retail trend to a bona fide institutional asset class. As Kraken’s Arjun Sethi put it, “This is how modern capital platforms should work. Transparent, programmable, and open to anyone with an edge.” In 2026, that edge might just come from picking the right platform—one that not only funds you but helps you become the trader you aspire to be.