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<\/p>\nAn 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.<\/p>\n
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.<\/p>\n
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\u2019s combined share to nearly 80%, highlighting what he described as record-high revenue concentration across the sector.<\/p>\n
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Source: <\/em>Lorenzo Valente<\/em><\/a><\/p>\n 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 \u201cextremely bullish\u201d for the crypto industry.<\/p>\n Related: <\/strong><\/em>ARK pushes back against a16z\u2019s \u2018TradFi wants blockchain, not DeFi\u2019 claim<\/strong><\/em><\/a><\/p>\n 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.<\/p>\n Last week, BitMEX announced it would shut down its exchange<\/a> 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.<\/p>\n Days later, BitMart announced it would end trading services<\/a> 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.<\/p>\n Consolidation has also come through acquisitions. Earlier this month, Bybit launched a locally operated exchange in Indonesia after acquiring a majority stake<\/a> in local digital asset firm NOBI, expanding its presence in one of Asia\u2019s largest crypto markets.<\/p>\n Source: <\/em>BitMEX<\/em><\/a><\/p>\n Magazine: <\/strong><\/em>The 100x obsession: Fundamentals grow in importance as crypto matures<\/strong><\/em><\/a><\/p>\nExchange closures add to consolidation narrative<\/h2>\n
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