ARK Invest said capital is becoming more selective, driving mergers, shutdowns, bankruptcies, and acquisitions across the crypto industry.

Lorenzo Valente said Hyperliquid, Pump.fun, and Ethena now capture nearly 80% of crypto application revenue.

Recent closures, exchange wind-downs, and acquisitions highlight growing consolidation across crypto infrastructure and trading platforms.

The crypto industry is entering its deepest consolidation phase, according to ARK Invest Director of Digital Assets Research Lorenzo Valente. He said capital has become more selective, forcing projects and exchanges without product-market fit to exit the market. That shift helps explain why revenue concentration has become a focal point for analysts tracking where usage and fees are actually accumulating. Valente also expects mergers, bankruptcy filings, shutdowns, and talent acquisitions to increase over the coming months as revenue concentrates among fewer companies.

Revenue Concentrates Across Crypto Sectors

According to Valente, revenue concentration has reached record levels across crypto applications, middleware, and Layer 1 networks. He said Hyperliquid and Pump.fun now generate 67% of total application revenue.

Adding Ethena raises the combined share to nearly 80%, according to Valente. He said the market structure has changed, with a small group of projects capturing most economic activity.

ARK Invest's first-quarter 2026 DeFi report also highlighted concentration across applications. The report showed Hyperliquid, Pump.fun, and Axiom generated roughly 67% of tracked application revenue through March 31, although those figures cover an earlier reporting period.

Closures And Acquisitions Continue

Valente said the next phase of consolidation will likely include more mergers, Chapter 11 filings, project closures, and acqui-hires. He added that stronger companies are increasingly positioned to absorb distressed competitors.

Recent developments reflect that trend across several market segments. Storj Labs entered voluntary Chapter 11 proceedings on July 26 while continuing network operations under court supervision. For industry participants, these moves show how consolidation is not limited to trading venues and can reach infrastructure providers as well.

Meanwhile, BitMEX announced it will close its exchange on Sept. 23 following a strategic review by parent company HDR Global Trading. BitMart also began winding down operations after suspending new registrations and deposits on July 26.

RootData's 2026 archive lists 99 projects that have closed, entered bankruptcy, or remained inactive for extended periods. The database includes several categories of project failures rather than bankruptcies alone.

Infrastructure Deals Gain Momentum

Consolidation has also expanded through acquisitions. On July 27, Payward, Kraken's parent company, agreed to acquire Magic Labs' wallet-as-a-service business.

According to the companies, the platform has supported more than 60 million wallets, over $10 billion in stablecoin volume, and about 200,000 developers. Financial terms were not disclosed, and the companies expect the transaction to close within weeks, subject to customary conditions.