Crypto entering biggest consolidation phase in history, says ARK analyst
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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An analyst from ARK Invest, Lorenzo Valente, has stated that the cryptocurrency industry is entering its largest consolidation phase to date, with revenue increasingly concentrated among a few dominant protocols. Valente noted in a post on X that investor selectivity has increased, making it difficult for projects and exchanges lacking a strong product-market fit to secure capital. This has resulted in weaker projects either struggling or shutting down, concentrating revenue among a small number of leading protocols.
Valente provided data showing that the perpetual futures exchange Hyperliquid and memecoin launchpad Pump.fun together account for roughly 67% of total crypto application revenue. When including the synthetic dollar protocol Ethena, these top three protocols control nearly 80% of the sector’s application revenue, representing a record-high level of revenue concentration. He anticipates this trend will accelerate, leading to more mergers and acquisitions, Chapter 11 bankruptcies, project shutdowns, and acqui-hires, a process he describes as “extremely bullish” for the overall cryptocurrency industry.
This observation comes amid recent announcements by several crypto exchanges planning to wind down operations, which supports the narrative of ongoing consolidation in the sector. BitMEX revealed it would shut down its exchange in September after a strategic review, citing insufficient trading interest amid accelerated delisting of trading pairs and derivatives. Similarly, BitMart announced it will end trading services in August 2024 before fully winding down in January 2027. These decisions are attributed to operational and market condition reviews.
In contrast to closures, consolidation has also been occurring through acquisitions. For example, Bybit recently expanded its presence in Asia by acquiring a majority stake in Indonesian digital asset firm NOBI and launching a locally operated exchange in Indonesia. Overall, the developments underscore a maturing crypto market where fundamentals and strong market fit are becoming increasingly central to success.