Ethereum is currently navigating a pivotal phase marked by the simultaneous expansion of its network capacity and a significant surge in institutional and whale capital inflows. This dual momentum is propelling the blockchain’s native asset, Ether (ETH), towards the significant $4,000 valuation, reflecting both fundamental technical improvements and escalating market confidence in the ecosystem’s future trajectory.
- Ethereum’s Layer 1 (L1) gas limit has increased to 37.3 million, with nearly 50% of stakers supporting a further rise to 45 million.
- The Geth version 1.16.0 update (June 27) significantly reduced archive node storage requirements from over 20 terabytes to approximately 1.9 terabytes.
- On July 20, newly established whale/institutional wallets acquired 58,268 ETH, valued at approximately $212 million, via FalconX and Galaxy Digital.
- SharpLink, a prominent corporate holder, increased its July holdings to 157,140 ETH, worth nearly $493 million, based on an average acquisition price of $3,136.
- Spot Ethereum Exchange-Traded Funds (ETFs) attracted $2.2 billion in net new capital over a recent five-day trading period.
Network Capacity Enhancements
A key development underscoring Ethereum’s evolution is the recent increase in its Layer 1 (L1) gas limit, a critical parameter determining the maximum computational work per block. Ethereum co-founder Vitalik Buterin confirmed that the gas limit has risen to 37.3 million, with nearly 50 percent of stakers signaling support for a further increment to 45 million. This expansion allows each block to process a greater volume of transactions and facilitate more complex smart contract operations, directly addressing historical concerns about network congestion and transaction costs.
Almost exactly 50% of stake is voting to increase the L1 gas limit to 45m. The gas limit is already starting to increase, now at 37.3m. pic.twitter.com/omUKQHuBvz
— vitalik.eth (@VitalikButerin) July 20, 2025
While a higher gas limit undoubtedly enhances throughput, it also introduces important considerations regarding network decentralization and the operational demands placed on nodes. Processing more data per block places increased strain on the hardware and bandwidth of nodes, which could potentially impact smaller operators. However, this capacity expansion is being strategically integrated with client efficiency upgrades, notably the Geth version 1.16.0 release on June 27. This update features a PBSS archive mode, dramatically reducing the storage requirement for archive nodes from over 20 terabytes to approximately 1.9 terabytes. This substantial reduction is crucial for fostering decentralization by making it significantly more feasible for independent operators and smaller groups to run full historical nodes, which are vital for decentralized applications, researchers, and validators.
The former. Client devs and researchers are doing things to make the kitchen more heat-resistant. pic.twitter.com/Wgi2F7mbUW
— vitalik.eth (@VitalikButerin) July 20, 2025
Ethereum developer Marius Van Der Wijden highlighted that this new setup enables efficient querying of past blockchain states, an essential capability for various ecosystem participants. This technical advancement effectively mitigates some of the decentralization concerns associated with increased block capacity by making node operation more accessible to a broader range of participants.
Surging Market Interest and Capital Inflows
Concurrently with these foundational network upgrades, Ethereum is experiencing significant renewed market interest and capital accumulation, driving its price closer to the $4,000 threshold. On-chain analytics reveal substantial acquisitions by large investors. For instance, Lookonchain reported on July 20 that two newly established wallets acquired a combined 58,268 ETH, valued at approximately $212 million, via leading digital asset platforms FalconX and Galaxy Digital. Similarly, EmberCN noted another substantial purchase of 13,462 ETH, worth roughly $50 million, executed on Binance at an average price of $3,714 per coin.
Two more newly created whale/institutional wallets bought 58,268 $ETH ($212M) via #FalconX and #GalaxyDigital.https://t.co/DQQ8PnaDtvhttps://t.co/rZZdoV7NJi pic.twitter.com/sM17q8t55N
— Lookonchain (@lookonchain) July 20, 2025
Corporate engagement in the Ethereum market is also escalating. SharpLink, identified as a leading corporate holder of Ethereum, added 4,904 ETH (approximately $17.45 million) within a single day. This recent acquisition pushed its total holdings for July to 157,140 ETH, valued at nearly $493 million based on an average acquisition price of $3,136 per coin. Furthermore, the burgeoning market for spot Ethereum Exchange-Traded Funds (ETFs) has seen unprecedented demand, attracting $2.2 billion in net new capital over a recent five-day trading period, more than double the inflows from the preceding week.
These converging trends—fundamental network scalability improvements alongside robust institutional and corporate capital inflows—collectively position Ethereum at the forefront of the digital asset landscape. The market’s strong response to these developments underscores a growing recognition of Ethereum’s evolving technical capabilities and its expanding role within the broader financial and technological ecosystems.
Former Wall Street analyst turned crypto journalist, Marcus brings a decade of expertise in trading strategies, risk management, and quantitative research. He writes clear, actionable guides on technical indicators, portfolio diversification, and emerging DeFi projects.