In Gardens of the Moon, we learn that Kruppe is the leader of the Darujhistan cabal. In Memories of Ice, he is withstands Caladan Brood's hammer (which surprises almost everybody). So why is he so powerful?
Although he is seen to be knowledgeable and incredibly intelligent elsewhere (and powerful within his dreamworld), we don't see a lot of direct power from Kruppe. For the hammer, it's likely that he was under the protection of K'rul.
In Memories of Ice, we get:
There is an Elder God behind the Daru, but even then, I think it's more an alliance of ... mutual benefit, almost between equals. A partnership, if you will.
Is he some god in disguise? A wizard of magnitude, an archmage? [...] My best guess. Kruppe is a mortal man. But gifted with an intelligence that is singular in its prowess. [...] If an Elder God was suddenly flung back into this realm, would he not seek out as his first ally the greatest of minds?
Assuming Whiskeyjack is correct (and he typically is), given an alliance between an Elder God and the most intelligent mortal alive, that accounts for a lot of (indirect) power; certainly K'rul could have protected him from the hammer, and his intelligence would be mostly sufficient gaining the Darujhistan leadership.