Key Insights
- Kraken acquires Backed Finance and strengthens its push into tokenized stocks and ETFs.
- The deal expands access to around-the-clock equity trading backed by real securities.
- Crypto IPOs continue to slump while exchanges benefit from rising Bitcoin trading volumes.
Kraken is moving deeper into blockchain-based equities after acquiring Backed Finance, a Swiss tokenization platform. The deal strengthens its position in the fast-growing segment of tokenized stocks and ETFs that mirror traditional securities while trading continuously on crypto rails.
Backed issues tokens tied one-to-one to real-world assets, enabling investors to trade equity-linked instruments beyond standard market hours. Kraken already listed several of Backed’s products, yet the takeover allows it to integrate the full stack directly into its core infrastructure. Arjun Sethi, Kraken’s co-CEO, stated that the move reflects a long-term strategy, rather than a reaction to market trends.
Kraken expands its influence in tokenized markets
Backed currently ranks as the second-largest provider of tokenized equities, holding around 23% of the sector and offering more than 60 mirrored stocks and ETFs under its xStocks product suite. The acquisition gives Kraken wider control over how these instruments are issued, managed, and delivered to its clients.
The trading activity of tokenized products is continuing to expand, with investors demanding instruments that act like standard equities, but that provide much greater flexibility. Since the tokens represent the underlying securities in custody, they are verifiable representations of actual assets. Additionally, they can be exchanged over the weekend and holidays, hence appealing to users who desire to have unrestricted access to the market.
Kraken’s latest move also comes as there is renewed interest in tokenized funds from global institutions. BlackRock has a tokenized money market portfolio now of over $2.3 billion in value. Other exchanges have also introduced various similar offerings, gambling on growing demand for instruments that combine liquidity, collateral and digital asset utility.
Backed’s xStocks strengthens around-the-clock trading
The acquisition is Kraken’s fifth takeover in the year. The exchange recently secured a new round of funding, valuing it at nearly $20 billion, and is still preparing for a targeted 2026 public listing. By acquiring technology and licenses from Backed, Kraken aims to expand the availability of xStocks and also make them native to its internal systems.
Backed, which was founded in 2021, built its platform to translate real-world equities to blockchain-tradeable instruments. Its architecture enables round-the-clock trading, enabling investors to respond to macro shifts, earnings news and geopolitical events without having to wait for traditional markets to reopen.
Kraken’s expansion comes at a tumultuous time for crypto-focused public listings. Since Bitcoin’s peak in October, more than $1 trillion in market value has been wiped out, making funding conditions tighter and weighing heavily on companies that have gone public earlier in the year. Large U.S. IPOs have dropped by over 5% on average this quarter, despite the S&P 500 recording modest gains.
