Kraken $100M Acquisition Paves Way for Prediction Markets Entry

Posted on: October 17, 2025, 01:46h. 

Last updated on: October 17, 2025, 01:46h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Cryptocurrency broker is buying Small Exchange from IG Group for $100 million
  • Deal sets stage for Kraken to enter US prediction markets space

Cryptocurrency brokerage firm Kraken is buying Small Exchange from IG Group for $100 million, marking the latest example of a financial services company pushing into the prediction markets arena.

Kraken
A Kraken logo. An acquisition by the crypto broker could signal a move into prediction markets. (Image: Business Wire)

Small Exchange is a designated contract market (DCM) licensed by the Commodities Futures Trading Commission (CFTC) – designations necessary for companies to offer exchange-listed derivatives, including yes/no event contracts, in the US.

This step connects spot, futures and margin products inside a single regulated liquidity system, reducing fragmentation, lowering funding latency and bringing onshore the kind of access and performance that has mostly existed offshore,” said Kraken co-CEO Arjun Sethi on the company’s blog. “Under CFTC oversight, Kraken can now integrate clearing, risk and matching into one environment that meets the same standards as the largest exchanges in the world.”

The post didn’t include the terms “prediction markets,” “event contracts” or “yes/no derivatives,” but Kraken’s purchase of Small Exchange is widely viewed as a precursor to some type of prediction markets presence while laying the “foundation for us to launch a fully U.S.-native derivatives product suite, creating a deep, sophisticated onshore venue in the world’s largest capital market.”

Kraken Employing Familiar Playbook

Acquisitions are an efficient avenue for established and prospective prediction markets players to gain footholds in the US. In fact, the Kraken deal for Small Exchange is comparable to one executed in July by Polymarket when that company shelled out $112 million for clearinghouse and derivatives exchange QCEX LLC as part of its plan to reenter the US.

Kraken’s acquisition stokes thoughts of other similarities. Should the digital currency broker move into prediction markets, it’d extend its competition with Crypto.com. Robinhood Markets (NASDAQ: HOOD), which offers clients access to hundreds of cryptocurrencies in addition to bonds, funds, and stocks, is also prediction markets player via a partnership with Kalshi.

Kraken has been making moves to bolster its non-crypto offerings. In March, the company paid $1.5 billion to buy NinjaTrader — a deal that allows the buyer to deepen its asset class menu while expanding its client base.

“Earlier this year, we acquired NinjaTrader, a leading U.S. futures platform, enabling U.S.-based clients to trade CME-listed cryptocurrency futures, alongside spot crypto in a unified interface. In October, we broadened this offering to include a broader range of contracts, covering equities, FX indices and commodities such as oil and gold,” according to Kraken.

Kraken Could Be Formidable Prediction Markets Player

Time will tell if Kraken is a legitimate threat to the likes of Kalshi and Polymarket, but the company enters the arena with some advantages, including high brand recognition in the cryptocurrency community — a space with deep prediction markets intersections and one viewed as pivotal for crypto use cases.

On a global basis, Kraken is the 14th-largest digital currency exchange by volume, but in terms of such companies that support transactions in US dollars, Kraken is in the top five.

Kraken, which offers approximately 1,250 markets, also ranks among the most trusted crypto brokers.