The 2024 Prop Firm Collapse: What It Means for Traders in 2025
The proprietary trading industry has just gone through one of its most challenging years. According to industry reports, around 100 prop firms shut down in 2024, significantly reshaping the market. With shifting regulations, evolving platform dynamics, and increasing scrutiny, the once fast-growing sector is now entering a phase of consolidation where only the strongest firms will survive.
The Fall of Prop Firms: What Went Wrong?
Last year, a major shift in the industry forced many firms to shut down. The sudden withdrawal of platform support from key technology providers led to operational challenges, pushing firms to either adapt or exit. As a result, many struggled with maintaining payouts, adjusting their business models, or keeping up with trader expectations.
Among the notable firms that ceased operations in 2024 were:
- Smart Prop Trader (ceased operations in November 2024)
- SurgeTrader (shut down on May 24, 2024, due to a licensing dispute)
- True Forex Funds (closed amid regulatory pressures)
- Funded Friends (acquired by TradingFunds after shutting down in September 2024)
- Funds For Traders (stopped services after Eightcap withdrew support for MT4/MT5)
- Karma Prop Traders (closed after two months due to liquidity issues)
- Funded Engineer (filed for bankruptcy in mid-2024)
- Ascetic Capital (ceased operations after just one week due to low sales)
- MyForexFunds (shut down following regulatory actions)
- Skilled Funded Traders (ceased operations in 2024)
The impact was significant. With fewer firms operating, challenge pass rates declined sharply, and the average trader’s investment dropped by approximately 50%. This signals a shift from rapid expansion to a more selective and risk-controlled approach.
The Rise of Industry Leaders
While smaller firms were unable to keep up, industry giants took advantage of the disruption. Some of the leading prop firms expanded through acquisitions, while others diversified their offerings to secure their market positions. A major deal involving one of the largest prop firms acquiring a regulated FX/CFD broker highlights the increasing trend of consolidation.
At the same time, traders have begun exploring alternative platforms as firms move away from legacy trading software. While MetaTrader 5 still dominates with a 60% market share, platforms such as cTrader, DXtrade, and TradeLocker are gaining traction, offering firms more flexibility.
What Should Traders Do Next?
With fewer firms in the market and stricter conditions, 2025 is expected to be more competitive and structured. Traders need to be more selective in their choices.
- Check firm stability – Look for firms with a proven track record and consistent payouts.
- Explore alternative platforms – Don’t rely solely on MetaTrader 5; consider cTrader, DXtrade, or TradeLocker.
- Understand new risk policies – With stricter payouts and challenge conditions, make sure you know the updated terms.
The key question remains—is this a temporary shift, or is the entire prop trading model evolving into something new?
Stay tuned as we track the next chapter in the proprietary trading space.
Read Also : The Wave of Closures In Prop Firms
