The Future of Crypto: Industry Consolidation on the Horizon

A New Era of Mergers and Acquisitions

The cryptocurrency landscape is standing at a crossroads, and according to Tom Farley, CEO of Bullish and former president of the New York Stock Exchange, we’re about to witness a dramatic reshaping of the industry. In a recent interview with CNBC, Farley painted a picture of an impending wave of consolidation that could fundamentally transform the fragmented crypto sector into something more streamlined and corporate. Drawing from his extensive experience in traditional finance, where he witnessed the exchange sector undergo massive consolidation, Farley believes the same phenomenon is about to sweep through the digital asset world. This isn’t just speculation from an industry outsider – it’s a prediction from someone who has seen this movie before and recognizes the telltale signs of an industry ripe for transformation.

The timing of Farley’s comments is particularly significant given the current state of the crypto market. Bitcoin, the flagship cryptocurrency and barometer for the broader digital asset ecosystem, has experienced a substantial correction, dropping nearly 45% from its October all-time high of $126,100 to trade around $69,405 at the time of his interview. This market downturn, rather than being viewed solely as a negative development, is being positioned by Farley as the catalyst that will finally force the industry to face reality. When prices are soaring and everyone’s portfolio is in the green, there’s little incentive to make hard decisions about mergers, acquisitions, or shutting down underperforming projects. But when the tide goes out, as Warren Buffett famously noted, you see who’s been swimming naked.

The Valuation Reality Check

One of the most striking aspects of Farley’s analysis is his assertion that this consolidation should have happened much earlier – perhaps a year or two ago. So what prevented the inevitable? According to Farley, it was the intoxicating effect of inflated valuations that kept false hope alive throughout the industry. During the boom times of 2020 and the subsequent bull runs, crypto companies and projects were valued at astronomical levels that bore little relationship to their actual business fundamentals. This created a distorted reality where founders and teams held onto unrealistic expectations about what their projects were worth.

Farley shared specific examples that illustrate just how disconnected from reality some of these valuation expectations had become. He described conversations with companies that had merely $10 million in revenue with no growth trajectory, yet they were demanding $200 million to be acquired. This represents a 20x revenue multiple for a stagnant business – a valuation that would be laughable in traditional business sectors but somehow seemed plausible in the crypto bubble. These kinds of expectations made deal-making nearly impossible, as no rational acquirer would pay such premiums for businesses that weren’t demonstrating growth or clear paths to profitability.

The “dream,” as Farley puts it, is now coming to an end. The market correction is serving as a much-needed reality check, forcing project teams and founders to look honestly at what they’ve built. Many are discovering an uncomfortable truth: they don’t actually have sustainable businesses; they have products. There’s a crucial distinction here that the crypto industry is being forced to confront. A product is something people might use or find interesting; a business is a sustainable entity that generates revenue, serves customers, and can stand on its own feet financially. The consolidation wave that Farley predicts will separate the businesses from the products, with the latter needing to either evolve, merge with larger entities, or disappear entirely.

The Double-Edged Sword of Consolidation

While consolidation might sound like a positive development for bringing maturity and stability to the crypto sector, it’s important to recognize that this process cuts both ways. Yes, larger and more established companies acquiring smaller projects can lead to better resource allocation, elimination of redundant efforts, and the creation of more robust platforms with greater staying power. However, this process rarely happens without casualties. When companies merge or when smaller projects are absorbed into larger entities, there are almost inevitably redundancies in personnel, technology, and operations.

This means that the consolidation wave Farley anticipates will likely bring with it a period of layoffs and internal disruption across the crypto industry. Employees who were brought on during the boom times may find their positions eliminated as duplicate functions are consolidated. Development teams working on similar technologies might be merged, with the inevitable friction that comes from combining different corporate cultures and technical approaches. For individual workers in the crypto space, this consolidation phase could be challenging, requiring adaptation, retraining, or in some cases, exits from the industry altogether.

Moreover, from an innovation perspective, there’s a legitimate concern about what gets lost when a thousand flowers stop blooming and only a few large gardens remain. The crypto industry has thrived in part because of its experimental, decentralized nature, where small teams could pursue unconventional ideas without needing approval from corporate overlords. As larger companies acquire smaller projects, there’s a risk that this experimental spirit gets dampened by corporate risk management, compliance concerns, and the need to show steady returns to shareholders. The question becomes: will consolidation bring needed discipline and sustainability, or will it stifle the creative chaos that has driven much of crypto’s innovation?

Investors Getting Selective

The shift toward consolidation isn’t happening in isolation – it’s part of a broader maturation of the crypto investment landscape. Eva Oberholzer, chief investment officer at venture capital firm Ajna Capital, provided additional context in her September 2025 comments to Cointelegraph, noting that VC firms have become dramatically more selective about which crypto projects receive funding. This pickiness from investors is both a cause and effect of the consolidation trend that Farley describes.

Oberholzer explained that the crypto industry has reached a different stage in its lifecycle, one that mirrors the evolution of other technology sectors throughout history. In the early days of any transformative technology – whether it was railroads in the 19th century, automobiles in the early 20th century, or internet companies in the late 1990s – there’s typically an initial explosion of experimentation where hundreds or thousands of companies pursue similar visions with slight variations. Investors, caught up in the excitement and fearful of missing out on the next big thing, fund many of these ventures indiscriminately.

However, as the technology matures and the low-hanging fruit gets picked, investors become more discerning. They start asking harder questions about business models, competitive advantages, paths to profitability, and management teams. This is the phase that crypto has now entered. The days when a whitepaper, a charismatic founder, and some blockchain buzzwords could secure millions in funding are largely over. Today’s crypto investors want to see actual users, real revenue, defensible market positions, and teams with track records of execution. This more rigorous investment environment naturally leads to consolidation, as projects that can’t meet these higher standards find themselves unable to raise the capital needed to continue as independent entities.

What This Means for the Crypto Ecosystem

The consolidation that Farley predicts represents more than just a reshuffling of corporate ownership – it signals a fundamental shift in what the crypto industry is becoming. The sector is transitioning from a wild west of experimentation to something that more closely resembles a mature financial and technology industry. This evolution brings both benefits and costs that will reshape the ecosystem in ways we’re only beginning to understand.

On the positive side, consolidation could lead to more user-friendly experiences as companies gain the resources to invest in better interfaces, customer service, and security. It could mean more regulatory compliance as larger entities have the legal and compliance infrastructure to navigate complex regulatory environments across different jurisdictions. It might result in greater institutional adoption as traditional financial players feel more comfortable engaging with established, well-capitalized crypto companies rather than obscure startups. And it could bring much-needed professionalism to an industry that has sometimes been characterized by amateur operations and outright scams.

However, there are legitimate concerns about what gets lost in this process. The crypto movement began with ideals of decentralization, democratized finance, and resistance to corporate and governmental control. As the industry consolidates around a smaller number of larger players, do these ideals get compromised? When a handful of major exchanges, wallet providers, and infrastructure companies dominate the landscape, does crypto start to look uncomfortably similar to the traditional financial system it was supposed to replace? These are questions the crypto community will need to grapple with as consolidation accelerates. The challenge will be finding a balance between the maturity and sustainability that consolidation can bring while preserving the innovative, decentralized spirit that made crypto revolutionary in the first place.