Weekly Snapshot: Up to 100 Prop Firms Shuttered in 2024 Shake-Up, Bitcoin Drops Below $80K

80–100 Prop Firms Shut Down in 2024

Breaking down this week's key events is a key highlight of our quarterly intelligence report that showed that the prop trading industry experienced its most dramatic shake-up yet. Over the past year, between 80 and 100 proprietary trading firms have shut down, challenge pass rates have plummeted, and the average trader’s investment has dropped by 50%. Yet, amid the chaos, a few dominant players are emerging stronger than ever.

According to estimates gathered by Finance Magnates Intelligence, between 80 and 100 proprietary trading firms may have disappeared from the market in 2024. This aligns with data presented by FunderPro mid-year, which estimated that the number had already reached around 50 firms at that time.

SEC Drops Gemini Probe

In the US, the crypto exchange Gemini became the latest beneficiary of a new dawn in crypto regulations. The U.S. Securities watchdog ended its investigation into Gemini without filing enforcement charges this week, but the exchange’s Co-Founder, Cameron Winklevoss, isn’t letting it go.

In a fiery post on X, Winklevoss condemned the agency’s handling of the probe, arguing that it inflicted massive financial and economic harm. He now demands consequences, including public firings and financial recompense for companies targeted by similar investigations.

However, OKX pleaded guilty and settled with the US Justice Department by paying more than $504 million for offering services to US-based clients without obtaining a money transmitter license. The settlement was reportedly made with Seychelles-based Aux Cayes Fintech, which operates as OKX.

The Biggest Crypto Heist

In one of the biggest stories that dominated headlines in the crypto space this week, Bybit, the cryptocurrency exchange hacked on February 21, reportedly withstood an outflow of over $6.1 billion over the weekend. However, the exchange’s CEO announced that the platform replaced the $1.4 billion worth of Ether stolen in the attack.

Bybit’s CEO, Ben Zhou, posted on X that his exchange “has already fully closed the ETH gap,” adding that “Bybit is again back to 100% 1:1 on client assets through Merkle tree.” He further noted that Bybit would soon publish an audited proof-of-reserves report.

In response to the theft, Bybit launched a $140M Recovery Bounty Program, offering incentives to experts who help track and retrieve stolen assets. According to the investigation findings, the incident took place during a multi-signature transaction facilitated through Safe Wallet. A threat actor reportedly intercepted the process, altered the transaction, and gained control of the wallet.

The attacker then transferred the funds to a separate wallet under their control. The colossal security breach caused a massive decline in the crypto space. Bitcoin, the top cryptocurrency, took a sharp dive, plunging to as low as $78K this week—depths it hasn’t plumbed in over three months.

Saxo Bank Client Base Jumps 132%

Away from the ever-volatile cryptocurrency space, online trading and investment platform Saxo Bank experienced an increase in its client base following an aggressive pricing overhaul, with new trading accounts soaring 132% in 2024 compared to the previous year. Moreover, the number of female clients has tripled.

“Our pricing model reflects our commitment to providing best-in-class investment solutions at competitive rates,” said Andrew Bresler, CEO of Saxo UK. “Seeing such robust growth in our client numbers – both in the UK and globally across our markets – is a testament to the strength of our offering and attractive pricing.”

Entering into an Agreement with a Liquidity Provider?

Brokerages often focus on tighter spreads and better pricing when engaging a new liquidity provider (LP). However, liquidity agreements require careful review. Several factors must be considered when entering or renegotiating such agreements, whether with a Prime-of-Prime or Prime Broker.

Firms should determine if their assets are segregated from the LP’s own funds and those of other clients. If there is no segregation, the jurisdictional rules and risks involved must be assessed. In cases of omnibus accounts, brokerages should consider the implications if another client in the pool becomes insolvent.

Nvidia's Earnings Soar

Lastly, Nvidia has once again shown its dominance, reporting a notable $39.3 billion in revenue for the fourth quarter of fiscal 2025. That's a 12% uptick from the previous quarter and a staggering 78% leap from the same period last year. Net income didn't lag behind either, swelling to $22.1 billion, an 80% surge year-over-year.

Lastly, AI dominated headlines again this week thanks to Nvidia’s earnings. For the quarter, GAAP earnings per diluted share was $0.89, up 14% from the previous quarter and 82% from a year ago. AI seems to have moved from just a hype into a money-making machine, and Nvidia is at the center of it all.

Until Next Week!