Cryptocurrencies are in the midst of a massive market shift, with three protocols now dominating revenue generation in the space, says research director at ARK Invest.
Three protocols now generate nearly 80% of all crypto application revenues, He says Lorenzo Valente from ARK Invest.
Together, perpetual futures platform Hyperliquid (HYPE) and memecoin platform Pump.fun (PUMP) generate approximately 67% of total app revenue.
They are joined by synthetic dollar protocol Ethena (ENA) to push the top trio to nearly 80% of the market.
Capital now selectively flows toward projects with strong product market fit (PMF), and teams and exchanges that lack this feature face closure or takeover, Valente says.
This trend extends to applications, middleware layers, and layer-1 blockchains alike.
Valente says,
“I believe cryptocurrencies are going through the largest consolidation phase in their history, which is much deeper than in previous bear markets.
The market structure has changed. Capital is much more selective, and teams and exchanges that do not have real PMF are closed…
I expect this to intensify over the coming months: more mergers and acquisitions, Chapter 11 filings, closings, and takeovers.
This is very bullish for the space.
Valiente seems to indicate that cryptocurrency investors are moving away from speculative projects and now prefer protocols that have strong fundamentals, indicating a maturity of the market.
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