The digital asset sector is currently experiencing its most significant consolidation phase to date, with revenue increasingly concentrating among a few dominant protocols, making it challenging for weaker projects to secure liquidity. This insight comes from Lorenzo Valente, an analyst at ARK Invest.
I believe Crypto is going through the biggest consolidation phase in its history, far more profound than in previous bear markets.
The market structure has changed. Capital is much more selective, and teams and exchanges without real PMF are shutting down.
Revenue concentration… pic.twitter.com/oY6pGSPV32
— Lorenzo Valente (@LorenzoARK) July 28, 2026
Valente observes that investors have become markedly more discerning. Platforms and exchanges lacking a solid product-market fit are finding it increasingly difficult to attract funding, while revenue is shifting towards market leaders.
He cited examples like Hyperliquid and Pump.fun, estimating that these two alone account for roughly 67% of the total revenue generated by crypto applications. If the synthetic dollar protocol Ethena is included, their combined market share approaches 80%.
Valente anticipates that the consolidation trend will accelerate in the coming months, leading to a wave of mergers and acquisitions, project closures, and Chapter 11 bankruptcies.
“This is an extremely optimistic outlook for the industry,” the ARK analyst added.
The ongoing consolidation is further evidenced by widespread layoffs and company closures. In July alone, notable industry veterans such as exchanges BitMEX and BitMart announced they would cease operations.
Additionally, analysts from Coinglass have raised alarms about the concentration of risk in the crypto derivatives market.