Is Crypto’s Historic Consolidation Phase a Prelude to an Unstoppable Surge?
Is the cryptocurrency world quietly transforming into an exclusive club where just a few big players rake in the lion’s share of the revenue? That’s exactly what Lorenzo Valente from ARK Invest suggests as he spotlights this unprecedented consolidation phase in crypto. Investors, armed with a sharper eye, are dropping the dime on projects that don’t quite make the cut, leaving only the ones with serious staying power to thrive. Imagine, Hyperliquid and Pump.fun alone claim about 67% of total crypto app revenue, and with Ethena in the mix, the top trio controls nearly 80%. It’s like watching a blockbuster cast narrow down, but instead of actors, it’s protocols fighting for the spotlight. And while this shakeout might ruffle some feathers—hello, mergers, shutdowns, and bankruptcies—it’s actually a bullish sign, sharpening the industry’s edge for what’s next. Curious to see how this saga unfolds? LEARN MORE.
An ARK Invest analyst says the cryptocurrency industry is entering what he describes as its biggest consolidation phase yet, with revenue increasingly concentrated among a handful of dominant protocols.
In a Wednesday post on X, Lorenzo Valente, a research associate at ARK Invest, said investors have become increasingly selective, making it harder for crypto projects and exchanges without strong product-market fit to attract capital. As weaker projects struggle or shut down, revenue is becoming concentrated among a small number of dominant protocols, he said.
As evidence, Valente said perpetual futures exchange Hyperliquid and memecoin launchpad Pump.fun account for roughly 67% of total crypto application revenue. Including synthetic dollar protocol Ethena raises the top three’s combined share to nearly 80%, highlighting what he described as record-high revenue concentration across the sector.
Source: Lorenzo Valente
Valente added that he expects the trend to accelerate in the coming months, leading to more mergers and acquisitions, Chapter 11 bankruptcies, project shutdowns and acqui-hires. Despite the shakeout, he described the consolidation as “extremely bullish” for the crypto industry.
Related: ARK pushes back against a16z’s ‘TradFi wants blockchain, not DeFi’ claim
Exchange closures add to consolidation narrative
The comments come as several crypto exchanges have announced plans to wind down operations in recent days, underscoring mounting pressures across parts of the industry.
Last week, BitMEX announced it would shut down its exchange in September after a strategic review by owner HDR Global Trading. The exchange had recently accelerated the delisting of trading pairs and derivative contracts, citing insufficient trading interest.
Days later, BitMart announced it would end trading services on Aug. 26 before winding down operations entirely in January 2027. The exchange said the decision followed a review of its operating conditions, market environment and future strategic direction.
Consolidation has also come through acquisitions. Earlier this month, Bybit launched a locally operated exchange in Indonesia after acquiring a majority stake in local digital asset firm NOBI, expanding its presence in one of Asia’s largest crypto markets.
Source: BitMEX
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