Why WisdomTree Withdrew Its XRP ETF and What It Means for XRP's Market Leadership in 2026

The withdrawal of WisdomTree's XRP ETF filing in early 2025 marked a pivotal moment in the cryptocurrency asset management landscape. Despite strong inflows into XRP ETFs and a growing institutional appetite for the asset, WisdomTree's decision to exit the race underscores the intense competition and regulatory uncertainties shaping the XRP ETF market. This move, however, has not dampened XRP's trajectory as a key player in 2026, with institutional adoption and regulatory clarity emerging as dominant forces driving its market leadership.

The WisdomTree Exit: Competition and Regulatory Hurdles

WisdomTree's withdrawal was primarily driven by two factors: institutional competition and regulatory ambiguity. By the time WisdomTree sought to launch its XRP ETF, first-movers like Grayscale, Franklin, Canary, and Bitwise had already captured over $1.25 billion in net inflows since their launches. These early entrants established a dominant market position, making it difficult for WisdomTree to differentiate its offering or attract sufficient assets to justify the costs of compliance and marketing.

Compounding this challenge was the U.S. Securities and Exchange Commission's (SEC) prolonged decision-making timeline. While the SEC's delayed rulings created uncertainty, the XRP ETF market continued to grow, fueled by institutional investors seeking diversified exposure beyond Bitcoin and Ethereum. WisdomTree cited Rule 477 of Regulation C under the Securities Act of 1933 to withdraw its filing without penalty, effectively acknowledging the unlikelihood of regulatory approval in a crowded and evolving market.

XRP's Institutional Momentum in 2026

By early 2026, these funds had amassed $1.3 billion in assets within 50 days of their launch in mid-November 2025, making them the second-fastest crypto ETF to reach the billion-dollar threshold after Bitcoin. This growth has been driven by a combination of regulatory clarity and strategic institutional positioning.

The August 2025 settlement between Ripple and the SEC removed a critical overhang, legitimizing XRP as a non-security asset and enabling the launch of U.S.-listed ETFs. This regulatory milestone, coupled with the progress of the CLARITY Act-a proposed framework to define digital asset market structures- has reduced compliance risks for institutional investors. As a result, XRP ETFs have seen 43 consecutive days of positive inflows, with over 746 million XRP tokens locked in custodial accounts, signaling sustained accumulation.

Institutional buyers have also capitalized on XRP's price weakness. While the token traded below $2.00 in early 2026-well below its July 2025 high of $3.65- retail selling created favorable entry points for large investors. This dynamic has tightened XRP's circulating supply, reinforcing its scarcity and long-term value proposition.

Regulatory and Market Catalysts for 2026

Looking ahead, several catalysts could solidify XRP's market leadership. The CLARITY Act remains a critical near-term driver, as its passage would provide a legal framework for digital assets and further reduce institutional hesitancy. Additionally, the potential launch of a BlackRock XRP ETF could act as a credibility boost, drawing conservative institutional capital into the space, much like BlackRock's Bitcoin ETF did for the broader crypto market.

Ripple's strategic initiatives also play a role. The expansion of its RLUSD stablecoin into markets like Japan and South Korea, alongside its application for a banking license, is expected to enhance XRP's utility and demand. Meanwhile, macroeconomic factors-such as dovish Federal Reserve policy- could amplify risk-on sentiment, further supporting XRP's price trajectory.

Price Projections and Risk Factors

Analysts project XRP's price to range between $2.00 and $4.00 in 2026, contingent on the alignment of regulatory, adoption, and macroeconomic factors. A bullish scenario envisions XRP reaching $4.00–$5.00 if key catalysts, such as the CLARITY Act and BlackRock's ETF, materialize. A base case anticipates steady progress to $2.50–$3.00, while a bearish case forecasts a decline to $1.50–$2.00 amid deteriorating macroeconomic conditions.

However, risks remain. Regulatory delays or adverse rulings could disrupt ETF flows, while macroeconomic volatility-particularly Federal Reserve policy- could dampen institutional risk appetite. Additionally, the absence of WisdomTree's entry highlights the challenges for new players in a market increasingly dominated by a few large ETF providers.

Conclusion

WisdomTree's withdrawal from the XRP ETF space reflects the competitive and regulatory hurdles inherent in the crypto asset management industry. Yet, XRP's institutional adoption and regulatory progress have positioned it as a formidable asset in 2026. With continued inflows, strategic catalysts, and a maturing market infrastructure, XRP is well-placed to maintain its leadership role, even as the landscape evolves. For investors, the key will be monitoring regulatory developments and institutional flows-factors that will ultimately determine XRP's trajectory in the coming year.