Crypto's Big Shrink: 3 Protocols Eat 80% of Revenue While Others Get Acquihired 🍴

The cryptocurrency industry is entering what an ARK Invest analyst described as its biggest consolidation phase to date, with application revenue increasingly concentrated among a handful of dominant protocols. In a Wednesday post on X, Lorenzo Valente, a research associate at ARK Invest, said investors have grown more selective, making it harder for projects and exchanges lacking product-market fit to attract capital. As weaker ventures stall or shut down, revenue is consolidating around a small number of leading protocols, he said.

Valente cited perpetual futures exchange Hyperliquid and memecoin launchpad Pump.fun, which together account for roughly 67% of total crypto application revenue. Adding synthetic dollar protocol Ethena pushes the top three's combined share to nearly 80%, a level Valente characterized as record-high concentration across the sector. He said he expects the trend to accelerate in the coming months, producing more mergers and acquisitions, Chapter 11 bankruptcies, project shutdowns and acqui-hires. Despite the shakeout, he called the consolidation "extremely bullish" for the crypto industry.

His comments arrive as several exchanges have announced wind-downs in recent days. Last week, BitMEX said it would shut down its exchange in September following a strategic review by owner HDR Global Trading, a move that came after it accelerated the delisting of trading pairs and derivative contracts due to insufficient trading interest. Days later, BitMart said it would end trading services on Aug. 26 before fully winding down operations in January 2027, citing its operating conditions, market environment and future strategic direction.

Consolidation has also played out through acquisitions. Earlier this month, Bybit launched a locally operated exchange in Indonesia after acquiring a majority stake in local digital asset firm NOBI, expanding its footprint in one of Asia's largest crypto markets.