An ARK Invest analyst says the cryptocurrency industry is entering the largest consolidation phase it has seen, with investor capital flowing toward a shrinking pool of dominant protocols while weaker projects face closure or absorption. The claim lands in the same week that two established exchanges confirmed they are winding down.
Revenue Concentration at Record Highs
In a Wednesday post on X, Lorenzo Valente, a research associate at ARK Invest, pointed to how unevenly crypto application revenue is now distributed. Perpetual futures exchange Hyperliquid and memecoin launchpad Pump.fun together account for roughly 67% of total crypto application revenue. Adding synthetic dollar protocol Ethena lifts the top three’s combined share to nearly 80%, a level Valente described as record-high concentration.
Valente attributed the trend to investors becoming increasingly selective, making it harder for projects and exchanges lacking strong product-market fit to attract capital. As marginal players struggle or close, the revenue those platforms once split is flowing to the handful of protocols that have proven staying power.
Two caveats matter for how that figure should be read. Application revenue is a narrow measure covering fees earned by onchain protocols, so it excludes the large centralised exchanges and the base-layer networks where much of the industry’s money still moves. Nearly 80% of app revenue is not the same as 80% of crypto. The numbers also come from a single social media post with no published methodology, which makes the precise split an estimate rather than an audited figure.
Mergers, Bankruptcies and Acqui-Hires Ahead
Valente said he expects the trend to accelerate over the coming months, forecasting a wave of mergers and acquisitions, Chapter 11 bankruptcies, project shutdowns and acqui-hires, deals in which a company is bought largely for its engineering team rather than its product. Despite the shakeout, he characterised the broader consolidation as ‘extremely bullish’ for crypto’s long-term development.
That framing is worth weighing against its source. ARK is an active investor across crypto and crypto-linked equities, so a thesis that the sector is maturing into a smaller set of durable winners sits comfortably with how the firm is already positioned.
Exchange Closures Reinforce the Picture
The timing of Valente’s remarks aligns with a cluster of exchange wind-down announcements. Last week, BitMEX said it would shut down its exchange in September following a strategic review by owner HDR Global Trading. The platform had already accelerated the delisting of trading pairs and derivative contracts, citing insufficient trading interest.
Days after the BitMEX announcement, BitMart disclosed it would end trading services on 26 August before winding down operations entirely in January 2027. The company said the decision followed a review of its operating conditions, market environment and future strategic direction.
Consolidation through acquisition is also active. Earlier this month, Bybit launched a locally operated exchange in Indonesia after acquiring a majority stake in domestic digital asset firm NOBI, extending its footprint in one of Asia’s largest crypto markets.
Winner-Take-Most Dynamics
The combined picture, a handful of platforms capturing the vast majority of revenue while BitMEX and BitMart prepare to exit, illustrates the winner-take-most dynamic Valente is flagging. Hyperliquid’s rise as the dominant perpetual futures venue and Pump.fun’s grip on memecoin issuance suggest that network-effect advantages are compounding for leading protocols, leaving less room for mid-tier competitors to sustain operations.
The catch is what those winners actually sell. Perpetual futures volume and memecoin launches are among the most cycle-dependent activities in crypto, and both tend to contract sharply when speculative appetite fades. A revenue league table topped by two speculation-driven businesses describes where money is flowing today, not necessarily which protocols will still be standing after the next downturn.
For investors, consolidation cuts both ways. It can mean a healthier industry carrying fewer projects that go nowhere, or it can mean concentration risk, where an outage, an exploit or a regulatory action against one dominant venue lands on a much larger share of the market than it would have two years ago.
