ARK analysts: Cryptocurrency market may enter the maximum consolidation stage

Crypto industry observers are increasingly focusing on the trend of revenue concentration, believing that this marks a new stage of integration in which only a few protocols account for the vast majority of application-level revenue.

In a post posted on Platform X on Wednesday, ARK Invest research assistant Lorenzo Valente pointed out that investors have become more picky, investing capital in projects and platforms with a clear product-market fit, while letting weaker projects struggle to close or be acquired.

Core Points

Lorenzo Valente of ARK Invest said that due to more prudent capital allocation, the crypto industry is entering the "largest stage of integration to date." He pointed out that the two major platforms, Hyperliquid and Pump.fun, together contribute approximately 67% of total crypto application revenue. If Ethena's synthetic dollar agreement is included in the statistics, the top three account for nearly 80%, indicating that the industry's revenue concentration has reached a record high. Valente expects this trend to intensify further, with more mergers and acquisitions, bankruptcies, project closures and talent acquisitions likely in the coming months. Several exchanges have recently announced the suspension of operations, further confirming the macro narrative that not all platforms can withstand the current market pressure.

Why revenue concentration is the focus

Valente's core thesis is that integration is no longer just about user growth or brand dominance, but increasingly depends on where revenue flows. According to his analysis, the industry is accelerating its concentration on a few "dominant agreements," and projects that fail to demonstrate strong appeal are finding it increasingly difficult to finance and maintain operations.

To illustrate this point, Valente specifically mentioned two platforms: Hyperliquid, the perpetual futures exchange, and Pump.fun., the memin issuance platform. He pointed out that the two together generate approximately 67% of total crypto app revenue. He further stated that when Ethena was included, the total revenue share of the top three platforms rose to nearly 80%, highlighting its so-called industry revenue concentration reaching a historically high.

For market participants, the practical impact is obvious: When revenue becomes highly concentrated, all other participants face more intense competition. New entrants and small platforms must not only strive to attract users, but also strive to generate enough sustained cash flow to attract institutional attention and deepen liquidity.

Integration cycle: May manifest itself as closures and mergers and acquisitions

While acknowledging the potential impact of concentration, Valente also sees this reshuffle as a potentially constructive process for the entire ecosystem. He expects this trend to accelerate and predicts more M & A activity in the future, as well as operational outcomes including Chapter 11 bankruptcies, project closures and talent acquisitions.

This outlook is critical for investors because it redefines "risk" from purely price-driven to becoming increasingly structural: business models, revenue quality and sustainable needs may determine a company's survival more than a short-term promotion cycle. For founders and teams, this means that integration may lead to fewer independent paths to scale and an increased likelihood of being incorporated into a larger platform through acquisitions, integration, or talent acquisition agreements.

At the same time, the speed at which integration will advance in various segments of crypto infrastructure remains uncertain. Valente's argument is based on the revenue dominance of the application layer, but due to factors such as regulation, product innovation and changes in user behavior, the industry may still see some strong growth points beyond the top projects.

Exchange closures add support to the integration narrative.

Valente's comments came as several exchanges announced plans to cease operations. These developments confirm his overall view on integration by demonstrating the pressures faced by parts of the trading ecosystem.

Last week, BitMEX said its owner, HDR Global Trading, decided after a strategic review that it would close the exchange in September. According to reports, before making the decision to close, the exchange accelerated the removal of trading pairs and derivatives contracts due to lack of trading interest. In a separate incident, BitMart announced that it would stop trading services on August 26, followed by a complete shutdown in January 2027. The company said the move was based on an assessment of operating conditions, market environment and its future strategic direction.

In addition to closures, integration is also reflected through acquisitions and expansion. Earlier this month, Bybit launched a locally operated exchange in Indonesia after acquiring a majority stake in NOBI, a move aimed at strengthening its presence in one of Asia's largest crypto markets. This comparison-with some platforms exiting and others integrating through expansion-reflects the market's survival of the fittest rather than evenly distributing momentum.

Next steps that investors and builders should focus on

If Valente's centralization argument holds true, then the most important signal in the near term may not be the number of announcements, but the measurable change in app revenue shares-especially whether top-level agreements continue to expand and whether more platforms dominate. At the same time, the industry will focus on the next wave of exchange and project restructurings to see how integration broadly affects users 'liquidity, custody and trading channels.