The cryptocurrency sector is currently undergoing its most significant consolidation phase, according to ARK Invest analyst Lorenzo Valente. This consolidation has led to a concentration of revenue among a few leading protocols, making it increasingly difficult for smaller projects to secure necessary liquidity.
Valente asserts, "I believe Crypto is going through the biggest consolidation phase in its history, far more profound than in previous bear markets." He notes that capital has become highly selective, leading to the shutdown of platforms and exchanges that lack effective product-market fit.
Valente highlights that major players like Hyperliquid and Pump.fun now represent about 67% of the total revenue from crypto applications. Including the synthetic dollar protocol Ethena, this share rises to nearly 80%.
Looking ahead, Valente predicts that this trend will hasten, potentially resulting in an increase in mergers and acquisitions, project closures, and bankruptcy filings. He also remarked on the optimistic outlook this consolidation could bring to the industry.
