**Breaking News: Institutional Prop Trading Firms Surge Past Banks in 2025-2026**
Institutional proprietary trading firms are dramatically outpacing traditional banks in electronic market-making, with non-bank trading firms generating an estimated $114 billion in revenue during 2025, marking a 45% year-over-year increase. Proprietary trading revenue specifically jumped nearly 60% to $84.3 billion, according to Crisil Coalition Greenwich analysis.
The momentum continued into 2026, with Hudson River Trading reporting $11.4 billion in quarterly trading revenue for Q2, capitalizing on market volatility and AI-driven equity movements. Jane Street generated over $40 billion in net trading revenues over the past twelve months despite losses from hedge fund Situational Awareness investments.
These firms are expanding beyond high-frequency equity trading into fixed income, crypto, ETFs, derivatives, and longer-horizon quantitative strategies. Heavy investments in AI infrastructure, computing capacity, and machine learning systems are creating scale advantages, with competitive edges shifting from connectivity speed to AI-powered signal generation and execution.
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FXnCO Insight
** Traders should expect continued market share erosion at traditional banks as prop firms’ AI capabilities and capital scale create widening performance gaps in electronic market-making.
Source: Finance Magnates