Crypto Wallet Revenue Drops 60% in H1 2026 as Gaming Steps Up

Crypto Wallet Revenues Plunge by 60% in First Half of 2026

Crypto wallet and interface revenues experienced a steep drop during the first half of 2026. According to a research report from Web3 insight provider 1kx, total wallet earnings fell by 60% year over year. In the first half of 2025, wallet providers generated approximately $1.1 billion. However, that figure dropped to roughly $400 million during the same period in 2026, marking a revenue loss of about $700 million.

Lower trading activity and volatile market conditions were the primary drivers behind this decline. When trading activity slows down across the broader market, wallet platforms process fewer token swaps and integrated transactions, which directly reduces their revenue.

Understanding How Crypto Wallets Generate Income

To understand why wallet revenues fell so sharply, it helps to look at how these platforms make money. Most self-custody wallets and wallet interfaces do not charge users a monthly subscription fee. Instead, they generate revenue by offering built-in decentralized finance (DeFi) services.

Wallet operators typically charge small convenience fees whenever users execute token swaps directly within the application. They also earn income through integrated staking tools, fiat-to-crypto payment gateways, and cross-chain bridge services. Because these income streams depend heavily on overall trading volume, wallet revenues naturally shrink when market trading cools down.

The DePIN Sector and Overall Consumer Slowdown

The wallet sector was not the only Web3 consumer category facing financial headwinds in early 2026. Decentralized Physical Infrastructure Networks, commonly known as DePIN, also recorded reduced income. Revenue across DePIN projects dipped 10%, falling from $293 million in H1 2025 to $264 million in H1 2026.

DePIN projects use blockchain tokens to encourage users to share real-world physical resources, such as wireless bandwidth, data storage space, or computing power. The drop in DePIN income contributed to a wider slowdown across the Web3 consumer space. Total consumer sector revenues fell 11% year over year, dropping from $5.6 billion down to $5.0 billion—a decrease of roughly $600 million.

Web3 Gaming and Gambling Offset Broader Market Losses

Despite the decline in wallet and infrastructure earnings, the consumer market avoided a deeper fall thanks to solid performance from Web3 gaming and gambling platforms. Revenues in the gaming and gambling category rose 8% year over year, growing from $3.1 billion in H1 2025 to $3.3 billion in H1 2026.

As a result of this growth, gaming and gambling now account for the single largest share of reported revenue in the Web3 consumer sector. Unlike wallet swaps, which depend heavily on market speculation, interactive entertainment applications appear to maintain a more consistent user base during market downturns.

Overall resilience from gaming offsets wallet weakness, but highlights heavy reliance on volatile categories,

BitcoinBTC-0.24% Wallet Activity Points to Potential Retail Shakeout

While wallet revenues took a hit, on-chain data revealed mixed user behaviors across major blockchain networks. Data provided by analytics firm Santiment shows that the Bitcoin network lost a noticeable number of active addresses.

Since mid-October, the Bitcoin network lost around 30,000 non-empty wallets, bringing the total count to just below 60 million. Santiment noted that this decline could indicate a period of capitulation, where smaller retail holders exit their positions after facing prolonged price fluctuations.

In market analysis, small-holder capitulation is sometimes viewed as a signal that weak hands have left the market, which can clear the path for a price recovery. However, traders should note that on-chain metrics do not guarantee price gains, and market trends can reverse quickly under volatile market conditions. Past performance of digital assets is no guarantee of future results.

EthereumETH-0.64% Sees Growing Participation Despite Quiet Prices

Ethereum presented a noticeably different story during the same timeframe. Data from Santiment shows that the total number of non-empty Ethereum wallets reached well over 207 million in September.

Staking Milestones Highlight Network Engagement

Alongside the growth in wallet addresses, the total amount of staked Ether (ETH) climbed past 40 million tokens around September. Staking involves locking up ETH to help secure the proof-of-stake network in exchange for protocol rewards.

Santiment suggested that these numbers point to heightened network participation, even after months of relatively weak price action for Ether. However, as 1kx highlighted, a rising count of network addresses does not automatically mean higher earnings for wallet providers, because simply creating or holding an address does not generate transaction or swap fees.