XRP dumps about 5% after WisdomTree decided to pull its application for a spot XRP ETF. The news spread fast across social media. Traders started selling right away.
WisdomTree sent a withdrawal request to the Securities and Exchange Commission on January 6. The company filed the original S-1 form back in November 2024. That filing was supposed to create the “WisdomTree XRP Fund.” But now the asset manager wants out.
The withdrawal letter says no shares were sold. It also mentions the company won’t move forward “at this time.” WisdomTree manages about $115 billion worth of assets. So this was supposed to be a big deal for XRP holders who wanted institutional products.
Markets React Fast
XRP dumps started showing up on exchanges pretty much right away. Volume went up. Prices went down. People got nervous. When a company as large as WisdomTree backs away, it makes investors wonder what went wrong.
There are still other firms waiting in line. Bitwise has an application. So does Canary Capital. 21Shares filed one too. None of them has pulled out yet. That could mean they see things differently than WisdomTree does. Or maybe they just want to wait longer.
But traders don’t always think that far ahead. They see a withdrawal and hit the sell button. That’s what happened here. XRP had been climbing on ETF hopes. Those hopes took a hit yesterday.
Also Read: Crypto ETF Inflows Surge: Are Institutions Turning Bullish on Bitcoin?
Why Did WisdomTree Back Out?
Nobody knows for sure. The filing doesn’t say much. Just that the company chose not to proceed right now. There could be a bunch of reasons behind that choice.
Maybe the SEC gave feedback that WisdomTree didn’t like. Regulators have been really careful with crypto products. Bitcoin and Ethereum got ETFs approved. But everything else is still waiting. XRP has extra baggage because of that lawsuit with Ripple. Even though that case got mostly resolved, the SEC might still have concerns.
Or maybe WisdomTree looked at the competition and decided the market was too crowded. Several firms jumped into the XRP ETF race around the same time. Not all of them will survive if approvals actually come through.
There’s also a chance this is just about timing. “At this time” is vague language. It leaves the door open for coming back later. Companies do that sometimes when they want to wait for better conditions.
What This Means for Holders?
XRP dumps aren’t exactly rare. The token has been through worse. Remember when the SEC lawsuit first dropped in 2020? Prices crashed hard. Exchanges delisted it. Everyone thought XRP was finished. But it came back.
This situation feels different though. Back then, it was a legal fight. Now it’s about whether institutions actually want to build products around XRP. When one of them walks away, it raises questions.
The good news is that other applications are still alive. If Bitwise or one of the others gets approved, prices could recover fast. Institutional investors have been sitting on the sidelines waiting for a regulated way to buy XRP. An ETF would give them that.
The bad news is that more companies might follow WisdomTree. If withdrawals start piling up, it means something is seriously wrong with the approval process. That would push timelines back by months. Maybe longer.
Also Read: XRP ETFs Break $60M but Why Isn’t XRP Pumping?
Where Things Stand Now?
Bitcoin didn’t really move after this news broke. Neither did Ethereum. That tells you this is mostly an XRP problem. Money rotated out of XRP and into other coins. Some went to Bitcoin. Some went to stablecoins. The usual flight to safety stuff.
At the time of writing this article, XRP is trading at 2.25 USD. That’s down from around 2.37 before the withdrawal news hit. Not a total disaster. But not great either.
ETF filings for Bitcoin did really well after they got approved last year. Billions of dollars poured in during the first few months. Ethereum ETFs also saw decent inflows. That success story is what got everyone excited about XRP products in the first place.
But getting approval is hard. The SEC moves slowly. They ask a lot of questions. Some companies just don’t want to deal with that process anymore.
What Comes Next?
XRP dumps might continue if more bad news comes out. Or prices could stabilize here if investors decide one withdrawal isn’t a big deal. A lot depends on what the remaining applicants do.
Bitwise is probably the one to watch. They’ve had success with other crypto products. If they pull out too, that’s a red flag. If they keep pushing forward, it means approval is still possible.
Political changes in Washington could also matter. A new administration might take a friendlier approach to crypto regulation. That could speed things up across the board. But that’s speculation at this point.
Also Read: As New XRP ETF Launches, Can XRP Break Out Against Bitcoin?
For now, XRP holders need to accept that ETF approval isn’t coming as fast as they hoped. WisdomTree’s withdrawal makes that pretty clear. Whether this is a temporary setback or a longer-term problem remains to be seen.
The token has survived plenty of challenges before. This is just another one. How it plays out depends on regulatory decisions that haven’t been made yet.
At the time of writing, XRP is trading around $2.27, down by 3.2% over 24 hours.
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