WisdomTree exits XRP ETF competition! Four companies share a 1.25 billion market pie

WisdomTree withdraws its spot XRP ETF application under SEC Rule 477, citing a current decision not to proceed with issuance. The filing was submitted in December 2024 and no shares have been sold. The remaining four issuers in the XRP ETF market have seen a net inflow of $1.25 billion since November, with Canary, Bitwise, Franklin Templeton, and Grayscale dominating the market.

Three Major Doubts About WisdomTree’s Withdrawal

On the X platform, @BankXRP@ account shared screenshots of a suspected withdrawal application sent to the SEC. The documents show that WisdomTree has applied to the SEC to withdraw its “WisdomTree XRP Fund” S-1 registration, initially filed in December 2024. The documents also indicate that the fund has not sold any shares, and the company has decided to “currently” not to move forward with the project. As of now, WisdomTree has not issued any public statement regarding this report, neither confirming nor denying it.

The first doubt concerns the reliability of the source. The information comes from social media posts, and as of January 7, neither the SEC website nor WisdomTree itself has directly confirmed this news. Some users on X quickly refuted the claim, while others requested official links from the SEC or statements from WisdomTree. Until the SEC database is updated or WisdomTree makes an official statement, the situation remains unclear.

The second doubt involves the strange timing of the withdrawal. On January 6, the same day WisdomTree withdrew its application, Morgan Stanley submitted S-1 filings for BTC and SOL ETFs, skipping XRP. This coincidence has led the market to speculate: Did WisdomTree learn some internal information and preemptively exit because they anticipated mainstream financial institutions’ lack of interest in XRP ETFs? Or is there some undisclosed regulatory communication hinting that XRP ETF approval might face more obstacles?

The third doubt concerns the vague reason for the withdrawal. The document only states that “a decision has been made not to proceed with this issuance,” without elaborating on specific reasons. This vague wording leaves room for various speculations but could also simply be standard legal language. Market analysts suggest possible reasons such as intense competition, poor cost-benefit analysis, doubts about XRP’s prospects, or waiting for a more suitable entry point.

XRP ETF’s Four Major Players Dominate $1.25 Billion Market

WisdomTree’s exit leaves the XRP ETF market monopolized by four major issuers. As of early January 2026, the total inflow into XRP ETFs is estimated to be around $1.25 billion to $1.3 billion, with assets under management continuing to grow. Canary Capital’s XRPC was the first XRP ETF launched on November 14, enjoying a first-mover advantage and attracting the largest capital inflows.

Bitwise, a veteran in the crypto ETF space, also performs strongly with its XRP ETF. Franklin Templeton, backed by a traditional asset management giant, attracts more conservative institutional investors. Grayscale, leveraging its extensive experience in crypto trust products, quickly established a market position. This oligopoly creates a high barrier for new entrants.

The poor performance of 21Shares’ XRP ETF confirms this trend. Since launch, the fund has only net inflows of $39.07 million, relatively modest compared to the early demand for the first four XRP ETFs. This indicates that the first-mover advantage in the XRP ETF market is very significant, and later entrants find it difficult to capture market share. WisdomTree likely observed this competitive landscape and 21Shares’ poor performance, concluding that the timing is too late to enter, and thus chose to withdraw temporarily.

From a business perspective, WisdomTree’s decision may be rational. Launching an ETF requires substantial upfront investment, including legal fees, compliance costs, market maker arrangements, marketing, etc., totaling potentially millions of dollars. If the expected market share is limited (as with 21Shares’ $39.07 million), these investments may not be recouped. Rather than fighting in a red ocean, it might be better to conserve resources for other more promising products.

Three Possible Paths for WisdomTree

Wait for Regulatory Clarification: After the January 15 “Market Structure Bill” review, if XRP’s legal status becomes clear, they may resubmit the application.

Shift to Other Assets: Allocate resources to less competitive crypto ETFs, such as ADA, AVAX, and other altcoins.

Permanent Exit: After evaluation, decide that the XRP ETF market does not align with company strategy and focus on other product lines.

Even if WisdomTree withdraws, demand for XRP ETFs remains strong. XRP’s trading price has risen this year, benefiting from ETF demand and reduced exchange supply. Therefore, some analysts believe WisdomTree’s move is more strategic than due to lack of interest. This could mean that WisdomTree is waiting for a better timing, clearer regulations, or the opportunity to reapply in the future.

For XRP investors, WisdomTree’s withdrawal may temporarily dampen confidence but does not change the fundamentals. The $1.25 billion inflow and continued support from four major issuers demonstrate genuine institutional demand for XRP. The January 15 bill review will be a key catalyst; if the outcome is positive, XRP could challenge the $2.4 high again or even higher.