Crypto Market Enters Largest Consolidation Phase Driven by Selective Capital Allocation
The crypto market is entering its largest consolidation phase yet, driven by more selective capital allocation. According to Lorenzo Valente, research associate at ARK Invest, investors are channeling capital towards projects and platforms with clear product-market fit while leaving weaker offerings to struggle or shut down.
Valente cites that Hyperliquid and Pump.fun account for about 67% of total crypto application revenue, and when Ethena's synthetic dollar protocol is included, the top three capture nearly 80%. This record concentration in revenue is a sign that consolidation is no longer just about user growth or brand dominance, it's increasingly about where revenue accrues.
Valente expects the trend to intensify, with more mergers, bankruptcies, shutdowns, and acqui-hires likely in the months ahead. He frames the shakeout as potentially constructive for the broader ecosystem, but acknowledges that the disruption can be significant for market participants.