Ethereum scales up as ETFs see record interest from big investors

Ethereum ($ETH) is going through one of its busiest and most important moments in recent years. From technical upgrades to big money movements and shifting market trends, the second-largest cryptocurrency by market capitalisation is making headlines on multiple fronts.

Ethereum validators have agreed to increase the block gas limit by 25%, moving it from 36 million to 45 million units. 

This change happened at block number 22,968,004 and aims to help Ethereum process more transactions per block. Simply put, it means less congestion when the network is busy.

This marks Ethereum’s first major block capacity increase since February 2025, when the gas limit was last set at 36 million. 

The upgrade is part of Ethereum’s bigger plan to scale the network and handle growing demand as more users and applications come on board.

But this is not the final goal. Validators are already looking at a short-term target of 60 million units and have even bigger plans for the long term: reaching 150 million units. 

That ambitious jump will happen through the upcoming Fusaka hard fork and the implementation of Ethereum Improvement Proposal (EIP)-7935.

To make sure the network stays stable as it scales, developers have also introduced EIP-7983, which limits how much gas a single transaction can use. 

This move helps protect against denial-of-service attacks that could otherwise slow down or harm the network.

As of now, Ethereum’s gas limit per block has inched up to 37.3 million, and around 47-49% of validators are supporting the move to 45 million. 

This push is part of the “pump the gas” movement, where core Ethereum client teams – Prysm, Nimbus, Lodestar, and Lighthouse – have committed to integrating the 45M cap by the end of July.

On 21-22 July, the Fusaka Devnet 3 tests will run, focusing on how Ethereum handles heavy traffic and large blocks. 

If these stress tests go well, they will clear the path for even bigger increases toward and beyond the 60 million unit mark.

Ethereum ETFs draw strong inflows as Bitcoin ETFs slow down

While Ethereum works on scaling its technology, its financial side is also seeing major action. On Monday, spot Bitcoin ETFs recorded their first daily net outflow since 1 July. 

According to SoSoValue, Bitcoin ETFs saw $131.35 million flow out, with Ark & 21Shares’ ARKB fund making up the largest part at $77.46 million. 

Grayscale, Fidelity, Bitwise, and VanEck also reported outflows. BlackRock’s IBIT, the largest Bitcoin ETF by net assets, saw no change.

This break comes after Bitcoin ETFs had pulled in $6.12 billion over the past 12 days. Meanwhile, Ethereum ETFs have kept up a strong streak, recording $296.6 million in positive flows on Monday alone. 

Fidelity’s FETH led with $126.93 million in inflows, followed by BlackRock’s ETHA with $102 million. Grayscale’s Mini Ethereum Trust and Bitwise’s ETHW also attracted fresh funds.

Since launching on 24 July, the nine spot Ethereum ETFs have seen $3.53 billion in total inflows over 12 days. For several days, Ethereum ETFs even brought in more money than Bitcoin ETFs.

Research analyst at Presto, Min Jung, explained why: “Bitcoin has rallied significantly this year, and for investors who feel they’ve ‘missed’ the BTC trade or are looking for the next opportunity, Ethereum is becoming the natural next step”.

Jung pointed out that Bitcoin’s dominance in the market has dropped by about 5% over the past week, suggesting early signs of money shifting toward altcoins like Ethereum. This type of rotation, Jung said, has often marked the start of altcoin seasons in the past.

However, Jung added a word of caution. Since institutional capital is driving much of the current crypto rally, it’s unclear if the momentum will extend beyond big names like Ethereum to smaller altcoins.

Institutions, whales, and Ethereum’s future

The Ethereum derivatives market is also heating up fast. In just seven days, perpetual futures open interest – a measure of the total value of outstanding futures contracts – jumped from under $18 billion to over $28 billion. 

That’s a massive $10 billion increase, or a 56% jump, in just one week. Singapore-based trading firm, QCP Capital, called it “the clearest evidence yet that altcoin season is finally underway”.

This surge in derivatives shows that investors are not only buying Ethereum directly but also betting on its price through complex financial products. 

The rush has been so intense that the price of “upside” call options has hit levels not seen since last year’s meme-coin craze.

Institutions, not just individual traders, are behind much of this activity. QCP noted large block trades on both CME and Binance, with sizes far above normal. A big factor behind this shift was last Friday’s approval of new stablecoin laws. These laws require stablecoin issuers to hold 100% US. 

Treasury or cash reserves and submit to strict oversight. With these clearer rules, companies are moving quickly to add stablecoins and Ethereum to their portfolios. They are seeing Ethereum as the backbone for the growing world of dollar-backed tokens.

On 17 July alone, Ethereum spot products drew $602 million – even more than the $522 million taken in by Bitcoin ETFs. BlackRock’s iShares Ethereum Trust led the pack and is now looking to amend its offering to allow on-chain staking. 

Many see this move as a potential game changer if the SEC gives it the green light later this year. Yield-bearing Ethereum ETFs would give institutions another strong reason to diversify beyond Bitcoin.

Big Ethereum holders, often called “whales”, are also making moves. One major Ethereum address known as “0x8C08…” sold 8,005 ETH for around $30.03 million at an average price of $3,751, locking in a profit of nearly $10 million. 

This wallet had bought 9,582 ETH just two weeks earlier at $2,725 each, marking a 38% return in less than two weeks. 

Notably, the wallet still holds 1,577 ETH (worth about $5.96 million), suggesting the holder believes Ethereum’s rally might continue.

Currently, Ethereum is trading just below $3,800 – levels it hasn’t seen in months. However, not everyone is convinced the rally will last. Long-time crypto critic and gold enthusiast, Peter Schiff, recently warned that Ethereum might be “close to topping out” and suggested investors might want to shift back to Bitcoin. 

While Schiff has long doubted crypto, his remarks sparked debate. Many traders and analysts disagree with Schiff’s view. 

They argue that Ethereum’s fundamentals – including its smart contract capabilities, staking rewards, and growing Layer 2 ecosystem – make it a solid long-term play. Even SharpLink Gaming, a major player in the sports betting space, dismissed talk of selling. 

The company recently bought a record 79,949 ETH at an average price of $3,238, spending about $258.9 million. This purchase helped it reclaim its position as the largest publicly traded Ethereum holder, with total holdings of 360,807 ETH, valued at around $1.3 billion.

Ethereum’s co-founder, Joe Lubin, recently spoke about where Ethereum is heading. In a conversation on the Bankless podcast, Lubin described this moment as Ethereum’s “Era of Strategy”. 

He said that in the early days, Ethereum was all about innovation and experimentation, with no central authority steering the ship. But now, as governments, financial institutions, and global companies show serious interest, the Ethereum community is asking bigger questions.

“What is the mission? How do we scale without losing our core values? How can we attract institutions while staying open to everyone?” Lubin asked. He stressed that this shift doesn’t mean Ethereum is becoming centralised. 

Instead, it’s about developing a clear, long-term roadmap that can survive real-world use, regulations, and mass adoption.

Lubin emphasised the need for better governance, clearer coordination, and building trust with institutions. “It is not a matter of managing the network; it is a matter of strengthening, clarifying, and bringing it into alignment with the global systems”, he said.

This phase could be what transforms Ethereum from an experimental project into a powerful, global infrastructure layer.

With its gas limit increase, booming ETFs, and fast-moving derivatives market, the Ethereum network is showing that it’s ready for the next stage.