ARK Invest Crypto Research Director Lorenzo Valente: The Largest Consolidation in Crypto History
ARK Invest Crypto Research Director Lorenzo Valente stated that the crypto industry is undergoing the largest consolidation phase in history, deeper than previous bear markets.
The market structure has changed, with capital becoming more selective. Teams and exchanges lacking product-market fit are shutting down, and revenue concentration has reached historical highs across applications, middleware, and Layer 1; Hyperliquid and Pump.fun together account for 67% of total application revenue, and with Ethena, the top three platforms account for nearly 80%.
Valente expects the consolidation to intensify in the coming months, with more mergers, bankruptcy filings, shutdowns, and talent acquisitions, which he believes signals a bullish outlook for the industry.
Source: Public Information
ABAB AI Insight
As the head of digital asset research at ARK Invest, Lorenzo Valente has been tracking crypto revenue and market structure for a long time; this assessment is based on the current revenue concentration at a few platforms like Hyperliquid, Pump.fun, and Ethena, indicating that capital and users have shifted from broad experimentation to validating leading products.
On the capital front, projects and exchanges lacking genuine product-market fit are exiting, releasing talent and attention, while mergers and acquisitions accelerate the concentration of quality teams at the top; rising revenue concentration means that the surviving platforms possess stronger pricing power and moats, with resources shifting towards applications and infrastructure that can sustainably generate fees.
A similar path can be seen in the early internet's portal and social platform consolidation period: after many small and medium players exited, leading companies gained larger shares and clearer business models. The current crypto application layer is in a "post-bubble head consolidation" phase.
Essentially, this is about capital concentration: as the market shifts from expansion to selection, revenue and liquidity concentrate on a few platforms with genuine demand, and pricing power shifts from quantity expansion to quality retention.
ABAB News · Law of Cognition
- The deeper the consolidation, the wider the moats of the survivors.
- Historical highs in revenue concentration signal the completion of selection.
- The bullish outlook lies not in quantity, but in the repricing of quality.