Crypto Industry Enters Largest Consolidation Phase Amid Increasing Selectivity

The crypto industry is undergoing its largest restructuring phase, driven by increased selectivity among investors. According to Lorenzo Valente, an associate researcher at ARK Invest, this 'largest consolidation phase' in crypto history has led to a concentration of revenues benefiting dominant protocols.

Three protocols, Hyperliquid, Pump.fun, and Ethena, now capture nearly 80% of the market's application revenues. This polarization of financial flows is unprecedented, with investors demonstrating extreme selectivity that makes capital raising particularly difficult for projects lacking proven product-market fit.

The scarcity of liquidity has pushed market players toward infrastructures capable of demonstrating immediate profitability and autonomous economic models. As a result, secondary entities are struggling to maintain their operations, while leaders in each niche benefit from a cumulative network effect.