ARK Invest says crypto entering deepest consolidation phase

The cryptocurrency industry is entering its most severe period of consolidation to date, according to an analysis from ARK Invest, with revenue and capital increasingly flowing to a handful of dominant players and setting the stage for a wave of project shutdowns, bankruptcies, and mergers. Lorenzo Valente, ARK Invest's director of digital assets research, stated in a July 28 social media post that the current market shakeout exceeds the depth of previous bear markets, driven by investors becoming highly selective and abandoning projects without strong product-market fit.

Valente pointed to extreme revenue concentration as evidence of this shift. His analysis indicates that the perpetual futures exchange Hyperliquid and the memecoin launchpad Pump.fun together account for roughly 67% of total crypto application revenue. Including the synthetic dollar protocol Ethena raises the combined share of the top three applications to nearly 80%, a level he described as a record high. This concentration extends beyond applications to middleware, infrastructure, and layer-one networks, suggesting a broad industry rationalization.

The researcher anticipates this environment will accelerate...