Crypto Witnesses 'Biggest Consolidation Phase' As Investors Become Much More Selective, Says ARK Analyst
A research director at ARK Invest says the crypto market is undergoing a major consolidation phase, with capital becoming increasingly selective. According to ARK Invest’s Lorenzo Valente, three protocols now generate nearly 80% of all crypto application revenue. Perpetual futures platform Hyperliquid and memecoin launchpad Pump.fun together account for roughly 67% of that total, with synthetic dollar protocol Ethena pushing the top trio close to 80%. Valente notes that capital is now flowing selectively toward projects with strong product-market fit (PMF), and teams and exchanges lacking that edge face shutdowns or acquisitions. This trend spans applications, middleware layers, and layer-1 blockchains. He describes this as ‘the biggest consolidation phase in crypto’s history, far more profound than in previous bear markets,’ adding that the market structure has changed. He expects the trend to intensify, with more mergers and acquisitions, Chapter 11 filings, shutdowns, and acqui-hires. Valente views this as ‘extremely bullish for the space,’ suggesting a shift away from speculative projects toward those with solid fundamentals, indicating a maturing market.