ARK Says Crypto Consolidation Will Accelerate With More M&A, Bankruptcies and Project Shutdowns

The cryptocurrency industry is entering a more pronounced consolidation phase than in previous market downturns, with capital increasingly flowing toward a small group of dominant projects as weaker participants exit the ecosystem, according to ARK Invest researcher Lorenzo Valente.

Specifically, Valente said teams and exchanges that have failed to establish product-market fit are leaving the market, resulting in a sharper concentration of revenue across key segments of the crypto industry, including applications, infrastructure, and Layer 1 networks.

Within the application sector, Hyperliquid (HYPE) and PumpFun (PUMP) together generate 67% of total revenue, underscoring the dominance of a handful of platforms. Adding Ethena (ENA), the three largest projects account for nearly 80% of application revenue, highlighting the industry’s growing reliance on a limited number of market leaders.

Looking ahead, Valente said he expects consolidation to accelerate in the coming months through increased merger and acquisition activity, bankruptcy filings, project closures, and talent acquisitions as the sector continues to streamline around stronger businesses.

Source: ARK Invest