An ARK Invest analyst says the cryptocurrency industry is entering what he describes as its biggest consolidation phase yet, with revenue increasingly concentrated among a handful of dominant protocols.

In a Wednesday post on X, Lorenzo Valente, a research associate at ARK Invest, said investors have become increasingly selective, making it harder for crypto projects and exchanges without strong product-market fit to attract capital. As weaker projects struggle or shut down, revenue is becoming concentrated among a small number of dominant protocols, he said.

As evidence, Valente said perpetual futures exchange Hyperliquid and memecoin launchpad Pump.fun account for roughly 67% of total crypto application revenue. Including synthetic…