Why WisdomTree withdrew its XRP ETF filing despite strong inflows

Source: Cryptonews Original Title: Why WisdomTree withdrew its XRP ETF filing despite strong inflows Original Link:

Overview

WisdomTree Digital Commodity Services has formally requested the SEC to withdraw its registration statement for the proposed WisdomTree XRP Fund. In an RW notice dated January 6, the trust stated that “it has determined not to proceed at this time” and asked the SEC to withdraw all related exhibits and amendments tied to its original December 2024 filing. No shares were sold under the registration, meaning the product never reached the market despite months of regulatory engagement.

The Competitive XRP ETF Landscape

The abandoned product was designed to provide investors regulated exposure to Ripple’s native token via shares listed on a major exchange, mirroring the structure of WisdomTree’s earlier Bitcoin ETF. Instead, the issuer exits a field where Grayscale, Canary, Franklin Templeton and Bitwise are already competing for flows and liquidity.

Analysts describe XRP ETFs as a “third path” beyond Bitcoin and Ethereum—a way for asset managers to differentiate without entering thinly traded long-tail tokens. However, this differentiation comes with risk; issuers must invest heavily in distribution and spreads to stand out in a sector that, while growing, still trails the liquidity profile of BTC and ETH vehicles.

Strong Inflows Contradict the Withdrawal

WisdomTree’s withdrawal contrasts sharply with the capital flowing into live XRP products. Spot XRP ETFs in the US have accumulated more than $1.25 billion in cumulative net inflows within weeks of launch, pushing total net assets to approximately $1.62 billion. On January 6 alone, XRP spot ETFs recorded $19.12 million in net inflows, extending a streak with no material outflow days.

Franklin’s XRPZ led that session with $7.35 million of fresh capital, followed by $6.49 million into Canary’s XRPC and $3.54 million into Bitwise’s XRP fund. Weekly inflows have exceeded $40 million, even as short-term price action remains volatile.

XRP’s Broader Market Context

Despite the ETF bid, XRP still trades well below its 2025 peak, echoing patterns seen in Bitcoin and Ethereum after their own spot ETF debuts. Market observers expect XRP’s trajectory to “broadly resemble” those earlier cycles, with phases of intense inflows followed by consolidation as speculative excess washes out.

Meanwhile, XRP’s positioning as a payments and treasury asset keeps institutional interest alive, particularly among investors seeking diversification from BTC- and ETH-heavy portfolios. This tension—booming ETF demand versus cautious price action—frames WisdomTree’s decision in a harsher light. In a market where capital is clearly flowing but market share is concentrating around a handful of first movers, withdrawing “for now” may reflect less about XRP’s prospects and more about an issuer recognizing it arrived late to a game that has already crowned its leaders.