Bitcoin Forum

Ok this is pretty basic question but surprisingly I tried googling it but didn't find the answer. So like always I turn back to my people for this answer. Why companies like binance choose certain cryptocurrencies for future trading and why they don't provide all cryptocurrencies for future trading.

Cause not all have a good trading volume and this is one of their main factor in launching future or derivative marginal trading for certain token or coin.  The need of volatility and market buyer and seller is important to provide a big ratio for the future trading. Well other factors might depend on their criteria but surelt this is one that fit for that.

Most cryptocurrencies especially going below the #30 CMC ranking lack liquidity, hence prices can be all over the place hence demand for futures will most likely be lower. Not to mention that with platforms like Binance, most of their users don't even know what futures trading is.

High trading volume is needed, if a coin do not meet a certain trading volume, an exchange will not consider it for leverage trading. But not only that, also total amount of the coin that people on the exchange can lend is another factor, that is why bitcoin which people lend out most for leverage trading have 125x while ethereum is 100x, many other altcoins go for 50x depending on the trading volume and total amount lenders are lending out. But trading volume is directly proportional to the total amount lenders are lending out.

If there is already 0 interest and trading volume on spot markets, there surely won't be any difference in derivative markets such as Options, Futures, or Swaps. Crypto exchanges earn profit from premiums in derivative trading. If there is no trading, there are no premiums and no profit. A wealthy investor won't care to bet his money on a coin listed somewhere on #4.000 on the list of available cryptocurrencies. They want to deal with assets that are sought-after.   

Of course they'll choose what's the best that has a good trading volume. It's all about where they can get better commissions than putting all of them but majority of the picks aren't going to have them good trading volume. They're a business and they will prioritize which is going to have the best volume and interest of the traders in their platform. I guess they'll keep on monitoring it which is going to be demanded by their users.

The basic concept of crypto futures trading is to allow users to use leverage to enhance their returns. That can be only achieved with the volume generated by particular crypto. That is why exchanges have selective crypto and pairs for a particular trade. If for example, a certain coin generated a good hype and volume it will be then added to the future as the more they trade the more chance of high returns.

Binance and the rest of the popular trading sites will choose those coins that have good liquidity to support with. Not a new thing to see and this become the basis of many traders. Perhaps, traders will look at those who have a huge trading volume and it becomes usual that not all cryptocurrencies show that which makes these trading exchanges step in and give help traders to choose preferable coins for future trading.

Some of the reasons why binance and most companies chooses certain cryptocurrency for future trading and why they didn't provide all cryptocurrency for future trading is because not all cryptocurrency have the ability to historical breakthrough in volume, market capitalization, press coverage,  experienced mainstream growth, a surge in popularity and market cap ranking. therefore they choose the coins that possesses this qualities to enhance future trading.

A coin that lacks trading volume is one that lacks ant form of longitivity yo it and as such, it would be difficult to leverage such coin with less demand on it. Hence, its most likely not to do well in a trade. You place it and it spends so much time before it gets picked up.
Most coins that tends to behave in such way are the pump and dump coins out there and we know there are a lot of them, coupled with the fact that, certain reputations follow these exchanges based on the activities or commodities they allow on its platform. You don't want to be known for launching shit coins. Hence, there is a need for selection on what is put out.

Are you sure you've tried Googling it?  It's on the Binance blog (https://www.binance.com/en/blog/futures/crypto-futures-trading-for-beginners-heres-a-5step-plan-to-get-started-421499824684902619), it makes you understand what is the real purpose of trading future.  It's the use of leverage.

There are more than 500 crypto pairs (https://www.binance.com/en/markets/futures-perpetual) that you have to choose and all of them have a marketcap and have a good trading experience.  So it means this coin has potential in the future, though its risk, this will depend on how you've researched those projects before investing in it as future trading.

@sheenshane I was just thinking wow everyone is nice to me and explaining not trying to tell they are superior or I am dumb but then you came.  Yeah I did Googled it and unable to find so sorry my king your subject isn't that smart. But still thank you for your reply and please be a bit humble just because your merit are a bit higher than me okay okay i admit way too higher than me you don't have put others. And thank all of you guys for your replies.