The cryptocurrency industry is entering what ARK Invest researcher Lorenzo Valente describes as its most significant consolidation phase to date, with revenue becoming increasingly concentrated among a small number of dominant protocols while weaker projects struggle to survive.
Valente said investors are allocating capital more selectively than in previous market cycles, creating a landscape where projects lacking strong product market fit face growing pressure through shutdowns, acquisitions, or bankruptcy.
关键精华
- ARK Invest’s Lorenzo Valente says crypto is experiencing its deepest consolidation phase yet.
- Hyperliquid and Pump.fun account for roughly 67% of total crypto application revenue.
- Adding Ethena raises the top three protocols’ combined share to nearly 80%.
- Valente expects mergers, acquisitions, bankruptcies, project closures, and acqui-hires to increase.
- Recent exchange closures and acquisitions illustrate the industry’s ongoing consolidation.
Revenue Shifts Toward Dominant Protocols
According to Valente, the 加密市场 has entered a new phase in which capital is increasingly flowing toward projects with proven products and sustainable revenue rather than speculative ventures. He said perpetual futures platform Hyperliquid and memecoin launchpad Pump.fun together generate approximately 67% of total cryptocurrency application revenue. When synthetic dollar protocol Ethena is included, the top three protocols account for nearly 80% of the sector’s total application revenue.
Valente noted that similar revenue concentration is also emerging across infrastructure providers and Layer 1 blockchain networks, suggesting the trend extends well beyond 分散的应用程序.
Selective Investment Reshapes the Market
Valente argued that today’s market differs from previous cryptocurrency downturns because access to capital has become significantly more selective. Projects and exchanges without strong product market fit are finding it increasingly difficult to raise funding or sustain operations.
In earlier market cycles, speculative interest and venture capital often allowed weaker projects to continue operating despite limited adoption. According to Valente, that dynamic has changed as investors increasingly prioritize businesses demonstrating real demand and sustainable economics.
He described the current consolidation as more profound than those seen during previous bear markets.
“I believe crypto is going through the biggest consolidation phase in its history, far more profound than in previous bear markets.”
He added that the market structure has changed, making it harder for projects lacking product-market fit to survive.
More Mergers and Closures Expected
Looking ahead, Valente expects consolidation to intensify during the coming months.
He forecast an increase in:
- Mergers and acquisitions involving cryptocurrency companies.
- Chapter 11 bankruptcy filings.
- Project shutdowns.
- Acqui-hires, where companies acquire businesses primarily to recruit their engineering and development teams.
According to Valente, these developments represent a natural reallocation of capital toward stronger businesses rather than a sign of broader industry weakness.
He described the consolidation trend as “extremely bullish” for the cryptocurrency sector over the long term.
Industry Developments Reflect the Trend
Recent announcements across the cryptocurrency industry appear consistent with the consolidation narrative. Last week, BitMEX announced plans to shut down its exchange following a strategic review by owner HDR Global Trading. The company had previously accelerated the delisting of several trading pairs and derivative contracts, citing limited trading activity.
不久之后 BitMart revealed it would discontinue trading services in August before winding down operations completely in January 2027. The exchange said the decision followed a review of its operating conditions, market environment, and longterm strategy. Consolidation has also occurred through acquisitions.
Earlier this month, Bybit expanded its presence in Indonesia after acquiring a majority stake in local digital asset company NOBI, allowing the exchange to establish a locally operated platform in one of Asia’s largest cryptocurrency markets.
Market Maturity Drives Structural Change
Valente’s analysis suggests the current market environment is increasingly rewarding protocols with sustainable business models rather than speculative momentum.
As revenue becomes concentrated among a handful of leading projects, smaller platforms face mounting pressure to either differentiate themselves, combine with stronger competitors, or exit the market altogether.
The trend indicates that the cryptocurrency industry may be entering a more mature phase, where long-term competitiveness depends increasingly on product adoption and economic performance instead of rapid capital inflows.
结语
ARK Invest researcher Lorenzo Valente believes the cryptocurrency industry is undergoing its most significant consolidation to date as investors become increasingly selective and revenue concentrates among a small group of dominant protocols. With Hyperliquid, Pump.fun, and Ethena accounting for nearly 80% of crypto application revenue, the competitive landscape is becoming more concentrated than in previous market cycles.
Valente expects this shift to drive more mergers, acquisitions, bankruptcies, project closures, and talent acquisitions in the months ahead. While the transition may prove difficult for weaker projects, he views it as a sign of a maturing industry where sustainable products and strong market demand increasingly determine long-term success.
