Kraken Acquires NinjaTrader
In a significant strategic move, Kraken, the cryptocurrency exchange, has successfully acquired NinjaTrader, a renowned futures trading platform. This acquisition positions Kraken to broaden its access to traditional derivatives trading for its U.S. customer base, aligning with the company’s goal of offering a comprehensive range of trading services.
Financial Highlights
The acquisition was highlighted in Kraken’s report on May 1, where it also announced that its Q1 revenue soared by 19% compared to the same quarter last year, reaching an impressive $471.7 million.
NinjaTrader, which is registered as a Futures Commission Merchant with the Commodity Futures Trading Commission, recently expanded its services by launching trading options for more than 11,000 stocks and exchange-traded funds for select U.S. clients.
Kraken has emphasized that this deal is unprecedented, marking the largest-ever partnership between a cryptocurrency platform and a traditional finance entity, and it is poised to open up markets in the UK, continental Europe, and Australia as part of its expansion efforts.
Future Plans and Current Challenges
As Kraken gears up for a potential initial public offering slated for early 2026, it is also considering a substantial debt package in the range of $200 million to $1 billion to support this ambition. While the first-quarter revenue growth is notable, it’s important to note that it represents a decline of 6.8% compared to the previous quarter’s earnings. Additionally, Kraken reported a 9.6% decrease in trading volume on a quarter-over-quarter basis, totaling $208.7 billion, alongside an 18% drop in the value of its custodied assets, which now stands at $34.9 billion.
This decline in trading metrics was partly attributed to a general slowdown in market activities, influenced by political factors such as U.S. President Donald Trump’s proposed tariffs, which contributed to an 18% contraction in the cryptocurrency market cap during this period. Notably, Kraken and other exchanges experienced heightened trading activities in the fourth quarter of the previous year, coinciding with the volatility following Trump’s electoral victory.
Customer Engagement and Workforce Changes
Despite the challenging market conditions, Kraken reported a slight increase in its adjusted EBITDA, which rose by 1% from the previous quarter to $187.4 million. Additionally, the exchange noted a 10% growth in the number of funded accounts, now totaling 3.9 million, indicating a trend of increased customer engagement on its platform.
In the backdrop of this growth, it was reported in mid-April that Kraken’s workforce underwent restructuring, coinciding with Arjun Sethi’s elevation to co-CEO last October, during which approximately 400 employees were laid off.
