WisdomTree’s ETF Retreat Deals Another Blow to Ripple’s XRP

Another door slams shut for XRP—WisdomTree just yanked its ETF application, leaving Ripple's flagship asset on the sidelines while the institutional adoption race heats up.

What's Behind the Pullback?

WisdomTree didn't spell out its reasons, but the move speaks volumes. Regulatory headwinds? Market positioning? Either way, it's a strategic retreat that sidelines one of crypto's most recognizable—and controversial—assets from the ETF gold rush. The timing stings, coming just as competitors stack approvals for Bitcoin and Ethereum products.

The Ripple Effect

This isn't XRP's first regulatory gut-punch, and it won't be the last. Each setback reinforces the narrative that some digital assets remain trapped in legal limbo—great for courtroom drama, terrible for mainstream financial pipelines. Meanwhile, TradFi veterans nod sagely, muttering about 'due diligence' while quietly backing other horses.

Where Does XRP Go From Here?

Ripple's legal battles with the SEC cast a long shadow, making ETF issuers skittish. Without the ETF on-ramp, XRP relies on exchanges and direct adoption—a tougher climb when Wall Street prefers packaged products. Yet the community holds firm, betting that clarity will eventually triumph over caution.

One cynical take? The finance world loves a neat narrative—and a messy, ongoing lawsuit doesn't fit the brochure. WisdomTree's retreat isn't just a rejection of XRP; it's a calculated bet that some battles aren't worth the paperwork.

Ripple’s XRP Declines As WisdomTree Abandons ETF 

XRP has faced a significant setback in its recent rally, as WisdomTree formally withdraws its registration for an ETF. Filed just over a month ago in December 2024, the asset manager has now requested the US Securities and Exchange Commission (SEC) to cancel its ETF application.

The news likely triggered the sharp decline in XRP’s price, erasing significant gains made earlier this week. WisdomTree’s filing with the US SEC confirmed that its planned ETF product WOULD not proceed, despite months of coordination with regulators and exchanges and substantial costs invested in the project. 

Notably, the filing cited Rule 477 of Regulation C under the Securities Act of 1933 and clarified that no shares had been sold under the original registration. This means the planned product was effectively halted before it reached the market. 

Initially, WisdomTree’s XRP ETF was designed to provide regulated exposure to the token through shares listed on Cboe BZX. This structure followed a model similar to the asset manager’s previous Bitcoin ETF. Given that WisdomTree’s Spot Bitcoin ETF is among the most prominent and widely adopted US-based crypto products, its decision to withdraw its XRP ETF comes as a surprise. 

This move highlights the underlying difficulties of launching new crypto investment vehicles, even for firms with an established reputation and a track record of success in related products. Currently, competition in the XRP ETF market is fierce, and this could have been a contributing factor to WisdomTree’s exit. 

Several firms, including Grayscale, Canary Capital, Franklin Templeton, and Bitwise, are already capturing the majority of inflows, vying for liquidity in an increasingly crowded space. By stepping away from its XRP ETF plans, WisdomTree not only avoids this congestion but also strategically positions itself to recalibrate its next move in the crypto space. 

XRP ETFs See First Outflow Since Launch

Following WisdomTree’s withdrawal of its XRP ETF application, data from SoSovalue revealed significant outflows across four of the five available products. Daily total net inflows turned negative on January 7, recording an outflow of approximately $40.8 million. 

This marks the first outflow since XRP ETFs launched in Q4 2025, ending a streak of over 35 days of consistent inflows. Canary Capital, Bitwise, Franklin Templeton, and 21Shares all experienced major outflows. Only Grayscale recorded positive flows of about 0.13%, roughly $1.69 million. 

Cumulative net inflows into the XRP ETF also reached $1.25 billion on January 6, 2026. However, as of writing, this figure has fallen to $1.2 billion, reducing the market value by approximately $5 billion.