When Kraken announced its acquisition of Breakout in September 2025, it sent a clear signal to the crypto industry: prop trading is here to stay. The deal marked the first time a major crypto exchange directly entered the proprietary trading sector, combining Kraken's institutional infrastructure with Breakout's evaluation-based funding model.
“Breakout allows us to allocate capital based on proven skills rather than access to capital itself,” says 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 documented performance, not background.”
The acquisition reflects a broader trend: what started as a retail trading phenomenon has evolved into a segment attracting serious institutional interest—and significant capital.
The numbers behind the boom
The prop trading industry has experienced remarkable growth. According to Google Trends data, global search volume for “prop trading” has increased by over 5,000% between 2020 and 2025. The keyword recently reached historic peaks, reflecting exceptional awareness and demand for funded trading programs.
Industry 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. This is an annual growth rate that outpaces most fintech sectors—prop trading increased by 1,264% between December 2015 and April 2024, compared to just 240% growth for traditional investment searches during the same period.
The crypto segment of this market is growing even faster. A recent industry report notes that 90% of the 20 largest prop trading firms experienced increased interest on Google in August 2025 alone, especially among crypto-native companies.
Why major players are taking notice
Kraken's entry into prop trading did not occur in isolation. The exchange had already acquired NinjaTrader for $1.5 billion and Capitalise.ai in the months leading up to the Breakout deal, signaling a strategic bet to capture the entire lifecycle of retail and professional trading. Industry observers have speculated that these acquisitions lay the groundwork for a potential IPO from Kraken.
The acquisition of Breakout addresses a specific value: by integrating prop trading directly into Kraken Pro, the exchange can identify and nurture skilled traders while generating revenue from both evaluation fees and profit sharing. Breakout had already issued over 20,000 funded accounts since its launch in 2023—a customer base now accessing Kraken's institutional liquidity and infrastructure.
For the prop trading industry, the acquisition represents a validation. When a regulated exchange of Kraken's caliber strategically invests in the funding model for traders, it signals that prop trading has transitioned from being a retail phenomenon to something more sustainable.
The evolving competitive landscape
The agreement between Kraken and Breakout has changed the competitive landscape within crypto prop trading. Established players like FTMO—generally regarded as the gold standard in the industry since 2015—now face competition not only from other prop firms but also from larger exchanges with greater resources and existing user bases.
FTMO has responded by expanding its crypto offerings, with 22 new pairs and improved spreads in July 2025, now offering over 30 crypto CFD instruments. The Czech company has served over one million traders and maintains a Trustpilot score of 4.8/5—something that matters in an industry where trust is crucial.
But the acquisition has also opened up opportunities for platforms that differentiate themselves. While exchange-backed prop firms compete on capital and infrastructure, a new category of crypto-native players has emerged, focusing on trader development in addition to funding.
Next frontier: AI-integrated trading development
Although Kraken's acquisition marks the institutional maturation of prop trading, it also illustrates a gap that innovative platforms are now competing to fill. Most prop firms—including Breakout—primarily focus on evaluation and capital provision. What they do not offer is systematic trader development.
This is important because the data on traders' performances is clear. Industry sources report that only 5-10% of traders pass their first evaluation, and an even smaller number receive payouts from funded accounts. The bottleneck is not a lack of capital—it is the psychological and technical barriers traders face.
Among the platforms addressing this, Fondeo.xyz has stood out as a good example of what some industry observers refer to as the “next generation” of crypto prop trading. The platform integrates AI coaching directly into the experience for funded traders—an approach that recognizes trading psychology as inseparable from trading performance. For traders who have struggled with the traditional evaluation model, this combination of funding and development presents a fundamentally different value proposition.
This approach reflects a larger trend in AI tools for trading. The global market for AI in trading is expected to grow from $24.53 billion in 2025 to $40.47 billion by 2029—a compound annual growth rate of 13.3%. However, while most AI tools focus on execution or analysis, the integration of AI coaching into prop firms' infrastructure represents a relatively untapped opportunity that platforms like Fondeo.xyz are now exploring.
What this means for traders
For ambitious crypto traders, Kraken's acquisition of Breakout represents both an opportunity and a warning. On one hand, institutional participation brings more credibility, better infrastructure, and potentially more stable platforms. Breakout traders now gain access to security standards at Kraken level, institutional liquidity, and support from one of the most trusted names in cryptocurrency.
On the other hand, institutional prop trading can become more competitive and less forgiving. Kraken has emphasized that the Breakouts evaluation program is “consciously strict,” designed to verify risk management and discipline in strategies before capital is released. Most applicants, they point out, do not pass on their first attempt.
This creates a natural segmentation in the market. Traders who are confident in their skills may prefer established names like FTMO or exchange-backed variants like Breakout. Those looking to build competence while accessing capital—especially in crypto's unique, 24/7 market—may find integrated platforms like Fondeo.xyz more suited for their development.
Looking ahead: The institutionalization of prop trading
The acquisition of Breakout by Kraken is unlikely to be the last of its kind. As prop trading reaches historical levels of search interest, and the market grows towards an expected valuation of $14.5 billion, other major exchanges and fintech players are likely to consider similar measures.
Industry observers expect consolidation. Smaller companies with unstable payouts or questionable operations will struggle to compete against platforms backed by exchanges with greater resources. At the same time, players with distinct characteristics—whether through better technology, AI-driven trader development, or specialized market focus—will find sustainable niches.
Google Trends data clearly shows that interest in prop trading is not waning. For traders, this means more opportunities, better infrastructure, and increased legitimacy. For the industry, it means that the transition from a phenomenon among private investors to an institutional asset is well underway.
As Sethi in Kraken put it: “This is how modern capital platforms should operate. Transparent, programmable, and open to anyone who has an edge.” In 2026, this edge may come not only from trading skills but also from choosing the right platform to develop them—whether it is an institutional giant or an innovative player betting on AI-driven development for traders.