WisdomTree Withdraws XRP ETF Filing Despite Significant Inflows

WisdomTree has decided to withdraw its application for an XRP exchange-traded fund (ETF) even as XPR funds see impressive inflows of $1.25 billion. This shows a contrasting trend in the market.

Key Takeaways

WisdomTree has officially asked the SEC to retract its XRP ETF registration statement.
The decision comes at a time when live XRP products have generated $1.25 billion in net inflows.
Several other companies, including Grayscale and Franklin Templeton, are competing vigorously in the XRP ETF market.
Despite the high inflows, XRP's market price remains below its previous highs, echoing patterns from Bitcoin and Ethereum's ETF launches.

WisdomTree withdraws XRP ETF filing amid strong spot ETF inflows

WisdomTree's Withdrawal of XRP ETF Plan

WisdomTree Digital Commodity Services, which proposed the WisdomTree XRP Fund, has formally requested the US Securities and Exchange Commission (SEC) to withdraw its registration statement on Form S-1. This was communicated in a notice dated January 6, where the trust stated, “pursuant to Rule 477 of Regulation C under the Securities Act of 1933, as amended, WisdomTree XRP Fund hereby requests that the Securities and Exchange Commission consent to the withdrawal of the Trust’s Registration Statement on Form S-1.”

The firm explained it decided not to proceed at this time and asked the SEC to withdraw all related documents and amendments linked to its original December 2024 filing. Importantly, no shares had been sold under this registration, indicating that the product did not make it to the market, despite extended discussions with regulators and exchanges.

The Competitive XRP ETF Landscape

The XRP ETF was intended to offer investors regulated access to Ripple’s native token through shares listed on Cboe BZX, following a structure similar to WisdomTree’s previous Bitcoin ETF. However, the issuer is now stepping away from a space where competitors like Grayscale, Canary, Franklin Templeton, and Bitwise are already competing fiercely for capital.

In recent months, the SEC has postponed decisions on pending XRP filings, compelling prospective sponsors to deal with fluctuating timelines and increasing legal and operational costs. Analysts perceive XRP ETFs as a "third path" when compared to Bitcoin and Ethereum, serving as a method for asset managers to distinguish themselves without venturing into lesser-known tokens. However, this route carries risk, as issuers must heavily invest in distribution efforts to carve out a niche in a sector still lagging behind the liquidity present in Bitcoin and Ethereum markets.

Robust Inflows Amid Withdrawal

WisdomTree’s decision stands in stark contrast to the robust inflows into active XRP products. In just weeks since their launch, spot XRP ETFs in the US have accumulated over $1.25 billion in net inflows, raising total net assets to about $1.62 billion, as per SoSoValue data. On January 6 alone, XRP spot ETFs attracted $19.12 million in net inflows and maintained an impressive streak without significant outflows.

Franklin’s XRPZ led this surge with $7.35 million in new investments, followed by $6.49 million to Canary’s XRPC and $3.54 million funneled into Bitwise’s XRP fund. Previous reports indicate weekly inflows regularly exceeding $40 million, notwithstanding the erratic price movements of the underlying token that have seen traders hesitant during rallies.

XRP's Market Context

Despite the ongoing ETF interest, XRP continues to trade below its 2025 peak, mirroring trends seen with Bitcoin and Ethereum following their respective ETF launches. Quant traders anticipate that XRP's market journey will "broadly resemble" these earlier cycles, characterized by significant inflows followed by consolidation periods as speculative excess settles down.

Meanwhile, XRP's appeal as a payments and treasury asset sustains institutional interest, especially among investors looking to diversify away from portfolios heavily weighted in Bitcoin and Ethereum. This dynamic—a thriving demand for ETFs and cautious price movements—makes WisdomTree's withdrawal appear more significant. In a landscape where capital is clearly flowing but market share is concentrating among a few initial players, walking away "for now" may reflect an issuer's realization of entering a competition with already established leaders.