Ethereum's gas limit increases as traders eye the $4000 mark

Ethereum’s gas limit is increasing as stakers and core developers group together to improve the network’s capacity. At the same time, the altcoin’s price is rallying as major investors try to push it beyond $4,000.

Vitalik Buterin, the co-founder of Ethereum, confirmed on Sunday that the Layer 1 gas limit has already risen to 37.3 million. He added that nearly 50 percent of stalkers support a further jump to 45 million. 

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

Raising this cap means each block can now process a larger number of transactions and power up more complex operations. But letting more work in each block also puts extra strain on the nodes that run the network, stirring questions about the effects on decentralization, security, and fees.

In earlier times, increases in block capacity led some to worry that smaller node operators might be squeezed out, weakening the network’s decentralized nature.

“Do you think this is a solution to end the gas fee issues in the long term, or will we see gas prices rise again later due to transaction pressure?” one user asked.

Buterin linked the push to higher gas limits with recent upgrades. He pointed to Geth version 1.16.0, released on June 27, as a key improvement. This update adds a PBSS archive mode, which cuts the required archive nodes’ space from over 20 terabytes to 1.9 terabytes.

The former.

Client devs and researchers are doing things to make the kitchen more heat-resistant.https://t.co/Wgi2F7mbUW

— vitalik.eth (@VitalikButerin) July 20, 2025

This release is a key step for client efficiency, making nodes faster and easier to run. By cutting storage from over 20 terabytes to around 1.9 terabytes, more independent node operators and small groups can keep full history, which helps keep the network decentralized.

Marius Van Der Wijden, a known Ethereum developer, mentioned that this new setup lets users look up the past states of the blockchain easily, a vital tool for decentralized applications, researchers, and validators. 

“Geth v.1.16.0 finally ships the PBSS-based archive node, you can have a geth archive node in ca. 1.9 TB (down from 20+ TB),” Wijden wrote. “Queries against historical states (What was my balance at block X) are possible; proofs against historical states are not (yet).”

Ethereum eyes $4000 as capital pours in

At the same time, Ethereum is drawing fresh market interest as its price creeps toward $4,000, a high not seen in a while. 

On July 20, Lookonchain, an analytics firm mentioned that two new wallets bought a total of 58,268 ETH, valued at about $212 million, in transactions from FalconX and Galaxy Digital.

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

EmberCN, an on-chain analysis firm, noted another large purchase of 13,462 ETH, worth roughly $50 million, made on Binance at $3,714 per coin. These moves suggest that both new whales and established holders see room for further gains.

The corporate world is piling in, too. SharpLink, now the top corporate Ethereum holder, added 4,904 ETH, about $17.45 million, in just one day. That raised its total for July to 157,140 ETH, worth nearly $493 million at $3,136 per coin on average.

Other than buys, spot ETFs focused on ETH have drawn record inflows. Over the past five trading days, these ETFs saw $2.2 billion in net new money, over twice the $1 billion added in the prior week. As network capacity expands and demand rises, Ethereum is once again at the center of attention.

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