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The cryptocurrency market has entered a phase of large-scale consolidation, surpassing in depth all previous bear cycles, stated the head of digital asset research at ARK Invest, Lorenzo Valente. The expert expects the number of bankruptcies, mergers and acquisitions to increase in the near future, which is "extremely positive for the industry."
Valente pointed out that the market structure has radically changed and capital has become much more selective. And projects and exchanges that do not have a product that was in demand by the market are ceasing operations.
Valente supported his opinion with statistics on record concentration of revenue in the industry, where Hyperliquid and Pump.fun accounted for 67% of all application revenue in the crypto industry. And if Ethena is added to this list, the top three already generate almost 80% of the total revenue.
"Revenue concentration has now reached historical highs at almost all levels," noted the expert, predicting that the consolidation trend will only intensify in the coming months.
The market picture described by Valente is also confirmed by other data: since the beginning of the year, about 100 crypto companies have ceased operations. Among them are six crypto exchanges, individual blockchain networks, and dozens of projects in the decentralized finance (DeFi) sector.
Regulatory Reasons
Parallel to market consolidation, there is also a likelihood of a regulatory-driven wave of mergers and acquisitions in the crypto market. After the launch of the European crypto regulation MiCA from July 1st, it may be easier for small crypto companies to sell their business or merge with larger players than to comply with the new requirements, according to experts interviewed by CoinDesk.
Crypto exchanges and crypto startups are now required to meet the same requirements as banks and other financial organizations. In the opinion of experts, companies without a MiCA license will gradually exit the European market, and users and their assets will shift to licensed participants. At the same time, self-custody of cryptocurrency will not disappear, but the market will largely shift towards regulated companies.
Europe may follow the path of Switzerland. After the introduction of digital asset legislation there, about three-quarters of the largest banks began offering cryptocurrency services. The banks themselves are more likely to not compete with crypto companies, but to use their services for asset custody, staking, or tokenization.
