Crypto Consolidation Deepens as Revenue Concentration Hits Record Levels

ARK Invest's director of digital assets research, Lorenzo Valente, believes crypto is entering its deepest consolidation phase yet. In a recent analysis, he found that Hyperliquid and Pump.fun generate 67% of application revenue, with Ethena adding to the top-three share reaching almost 80%. Valente expects more mergers and acquisitions, Chapter 11 filings, shutdowns, and talent-focused acquisitions in the coming months.

The concentration of revenue has reached record levels across applications, middleware, and Layer 1 networks. ARK's Q1 report showed application revenue falling 23% quarter-over-quarter to approximately $485 million. Hyperliquid generated about $145 million, Pump.fun produced $123 million, and Axiom earned $58 million during the quarter.

These figures support Valente's argument that the market structure has changed, with capital being more selective. Teams and exchanges without a proven product-market fit are shutting down. Recent cases such as Storj Labs' Chapter 11 filing and BitMEX's shutdown provide evidence of accelerating industry consolidation pressures.