- Deutsche Börse invests $200M in Kraken, taking a 1.5% stake as it expands into blockchain.
- The deal values Kraken at $13.3B, below its prior $20B valuation, as it prepares for an IPO.
- The move highlights growing institutional adoption of crypto despite market volatility.
Deutsche Börse AG has taken a significant step deeper into the crypto sector, investing $200 million in Payward Inc., the parent company of Kraken.
The deal gives the German exchange operator a 1.5% fully diluted stake in Kraken. Notably, the deal will close in the second quarter, pending regulatory approval.
Based on the transaction, Kraken is worth approximately $13.3 billion, well below the $20 billion valuation it achieved during a November fundraising round.
IPO Plans and Strategic Partnership
Kraken, one of the long-standing crypto exchanges, is preparing for a public listing as early as this year. The investment follows a partnership announced in December between the two firms.
As part of their collaboration, Kraken will integrate into Deutsche Börse’s FX trading platform, 360T, while Deutsche Börse continues expanding its blockchain-based infrastructure.
Thomas Book, a board member at Deutsche Börse, described the partnership as part of a broader strategy to build a “fully hybrid market infrastructure,” combining traditional and tokenized assets into a single ecosystem.
Traditional Finance Pushes Into Crypto
Meanwhile, the move highlights how major financial institutions are increasingly embracing digital assets. Earlier this year, Intercontinental Exchange Inc., owner of the New York Stock Exchange, also invested roughly $200 million in crypto exchange OKX.
This institutional interest comes amid improving regulatory clarity in regions like the European Union and a more favorable policy backdrop in the United States under Donald Trump.
Kraken itself has been expanding its regulatory footprint. It recently gained access to the Federal Reserve’s core payments system and is launching MiFID-regulated crypto derivatives in Europe.
Building a Blockchain-Based Market Infrastructure
Deutsche Börse has been actively developing blockchain-based services. Its Clearstream unit recently launched a platform for trading tokenized securities, aligning with its vision of integrating digital assets into mainstream finance.
The company sees tokenization as a key part of the future financial system. It aims to create a seamless value chain regardless of whether assets are traditional, tokenized, or fully digital.
Despite growing institutional adoption, the crypto market continues to face challenges. Bitcoin has fallen about 40% from its October peak, putting pressure on exchanges across the industry.
Competitors like Gemini have reportedly struggled, cutting jobs and seeking additional funding amid the downturn.
Security remains another concern. Kraken recently disclosed an attempted extortion by a criminal group claiming access to some client account information, though the exchange emphasized that customer funds were never at risk.
Related: Kraken Faces Extortion Threat Tied to Insider Security Incidents
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