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Kraken buys Small Exchange in $100 million deal to expand U.S. derivatives operations

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Crypto exchange Kraken has agreed to acquire Small Exchange from IG Group for $100 million, marking a major step toward building a fully U.S.-based derivatives platform that can serve both retail and institutional traders.

Small Exchange holds a Commodity Futures Trading Commission (CFTC) license as a designated contract market, giving Kraken access to a regulated venue for offering futures and options — products that have become central to the digital asset industry’s push for mainstream legitimacy.

“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,” said Arjun Sethi, Kraken’s co-CEO.

The acquisition reflects a growing trend of digital asset firms entering traditional capital markets, as cryptocurrencies gain wider acceptance and investors demand more sophisticated risk-management tools. Analysts say institutional adoption is accelerating as regulated crypto derivatives gain traction.

“Digital asset firms are no longer content being sideshow players,” said Michael Ashley Schulman of Running Point Capital Advisors. “They aim to wrest seats in the core capital markets ecosystem.”

Kraken described the acquisition as a strategic move to establish “institutional-grade markets” as crypto matures under a more crypto-friendly regulatory climate in the U.S. under President Donald Trump.

Earlier this year, Kraken also announced a $1.5 billion deal to acquire NinjaTrader, another retail futures trading platform, strengthening its position in the fast-growing derivatives segment.

BBVA Advises Wealthy Clients to Allocate Up to 7% in Bitcoin, Signaling Growing Institutional Embrace of Crypto

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BBVA, one of Spain’s largest banks, is advising its private banking clients to allocate between 3% and 7% of their portfolios to cryptocurrencies, primarily bitcoin and ether, according to Philippe Meyer, head of digital & blockchain solutions at BBVA Switzerland.

Speaking at the DigiAssets conference in London, Meyer stated the advisory began in September 2023, reflecting a growing confidence in the sector. While many banks passively allow crypto investments, BBVA stands out by actively recommending such allocations — a rare move among mainstream European financial institutions.

“With private customers, since September last year, we started advising on bitcoin,” Meyer said. “The riskier profile, we allow up to 7% of portfolios in crypto.”

Context and Strategy:

  • BBVA started executing crypto trades for private clients in 2021, but this is the first time it has formally advised allocations.

  • The recommendation currently includes bitcoin and ether, with plans to extend coverage to other digital assets later in 2025.

  • Meyer emphasized that even a 3% allocation can boost portfolio performance without exposing clients to excessive risk.

Market Momentum:

Bitcoin hit record highs in May, continuing its recovery from the crypto market collapse in 2022, which saw major platforms like FTX implode. The rebound has been aided by increased institutional interest and a pro-crypto stance from U.S. political figures, including Donald Trump.

Despite these advances, regulatory bodies remain cautious:

  • The European Securities and Markets Authority (ESMA) noted earlier this year that 95% of EU banks still do not engage in crypto activities.

  • Regulators consistently warn investors of crypto’s volatility, reiterating that one should be prepared to lose their entire investment.

BBVA’s approach reflects a nuanced shift in institutional sentiment, especially for wealthy clients seeking diversification amid evolving digital asset landscapes.