ARK Invest researcher Lorenzo Valente said the crypto industry is entering what he called the largest consolidation phase on record, arguing that investors are becoming more selective and that projects and exchanges without product-market fit are steadily losing their ability to attract capital.
Revenue is clustering around a handful of protocols
Citing the data, Valente said perpetuals exchange Hyperliquid and meme coin issuance platform Pump.fun together account for about 67% of total crypto application revenue. When synthetic dollar protocol Ethena is added, the top three protocols make up nearly 80% of the total.
He framed that figure as an unusually high level of revenue concentration in crypto innovation.
Hyperliquid, Pump.fun and Ethena show the market’s structural shift
According to Valente, the three protocols point to a broader change in how the market is organized. Hyperliquid has drawn derivatives trading volume with low fees and high efficiency. Pump.fun has kept fragmented capital moving through its meme coin launch mechanism. Ethena, in turn, has generated steady returns through its synthetic dollar order-book strategy.
Though they operate in different segments of the market, all three have taken dominant positions. In that setup, crypto’s revenue model is moving away from a wide distribution of winners and toward a smaller group that captures most of the value.
Valente expects more closures, deals and liquidations in the coming months
Valente said the trend is likely to accelerate over the next few months, leading to more mergers, acquisitions, bankruptcies, liquidations and project closures. He described the shakeout as “very bullish,” saying weaker players are exiting while resources are being concentrated in more efficient protocols.
Exchange shutdowns are already showing up
That view lines up with recent developments among trading venues. Last week, perpetual futures pioneer BitMEX said it will close its trading platform in September, ending more than five years of operations. A few days later, BitMart said it will stop trading services on Aug. 26 and expects to complete a full shutdown in January 2027.
The report tied both closures to the same pressure point: intensifying competition has spread trading volume across newer platforms. BitMEX accelerated delistings of trading pairs, while BitMart reviewed its operating conditions, and both moves were presented as concrete signs of weak product-market fit.
Consolidation is also moving through acquisitions
The reshuffle is not limited to shutdowns. Earlier this month, Bybit acquired Indonesian digital asset company NOBI and used the deal to establish a localized exchange in one of Asia’s largest crypto markets, a sign that expansion through acquisition is also picking up speed.
From an investor perspective, the consolidation phase also suggests that market choices are narrowing. The earlier approach of trying everything is giving way to a stronger focus on core protocols. In ARK Invest’s reading, crypto’s next phase is less about explosive broad-based growth and more about a repricing around efficiency and concentration.