ARK Analyst: Crypto Hits 'Biggest Consolidation Phase' as Capital Gets Picky

"I believe crypto is going through the biggest consolidation phase in its history, far more profound than in previous bear markets," Valente said. "The market structure has changed. Capital is much more selective, and teams and exchanges without real PMF are shutting down."

He said he expects the trend to intensify over the coming months, with more M&A, Chapter 11 filings, shutdowns and acqui-hires. He called the shift "extremely bullish for the space."

The revenue concentration at the top suggests investors are moving away from speculative projects and favoring protocols with solid fundamentals, Valente indicated. The broader pattern is visible across the crypto market analysis landscape, where liquidity and attention are consolidating around a shrinking set of names.

The consolidation marks a departure from earlier cycles where capital spread more evenly across hundreds of projects. Valente's comments echo a growing view among analysts that the current cycle rewards execution over narrative, with only the top protocols capturing the bulk of user activity and fees.