There was a bit of news that came out regarding HIVE.  It might have flown under the radar due to the fact that it is the holiday season.


[Binance](https://inleo.io/@leoglossary/leoglossary-binance) decided to add a [futures contract](https://inleo.io/@leoglossary/leoglossary-futures-contract) for HIVE to its platform.  This will provide eligible [traders](https://inleo.io/@leoglossary/leoglossary-trader) with certain benefits.


Unfortunately, for some, like those in the United States, trading on that Binance is forbidden.


# Binance Adds HIVE Futures Contract


Binance fell under the radar after an eventful [year](https://inleo.io/@leoglossary/leoglossary-year) with CZ.  Since he went to jail, things appear to be quiet with the [exchange](https://inleo.io/@leoglossary/leoglossary-exchange).


That said, they are still operating and expanding their offerings.  As of the 23rd of December, this includes HIVE.


<center> https://img.inleo.io/DQmRPgs74UhkDkMB6mapo1TjNBA1QhY8WQ8XR5qdsVqCJAV/hive.png 
[Source](https://www.binance.com/en/support/announcement/binance-futures-will-launch-usd%E2%93%A2-margined-hiveusdt-perpetual-contract-with-up-to-75x-leverage-3711e9a08327401780ef31aea01ead1b) </center>


Futures contracts are a [derivative](https://inleo.io/@leoglossary/leoglossary-derivative) of the [underlying asset](https://inleo.io/@leoglossary/leoglossary-underlying-asset).  This is another vehicle for traders to utilize when approaching HIVE.  In fact, there are a number of benefits.


## Advantages To Futures contracts


Traders of HIVE have a couple different [options](https://inleo.io/@leoglossary/leoglossary-options) that was not previously available.


As we can see, [leverage](https://inleo.io/@leoglossary/leoglossary-leverage) can be applied.  For those who like to speculate to larger degrees, this can result in a 75x max.  Obviously, for those who are right in the [price](https://inleo.io/@leoglossary/leoglossary-price) moves, it can be highly profitable.


Of course, the flipside is also true which is why many should avoid this.


The second benefit comes for the reverse.  Traders can [hedge](https://inleo.io/@leoglossary/leoglossary-hedge) their holdings in HIVE by derisking via a [contract](https://inleo.io/@leoglossary/leoglossary-contract).  This means going [short](https://inleo.io/@leoglossary/leoglossary-short-selling) to offset a long position in the underlying asset.


When most people think of derivatives, they only consider the leveraged aspect of things since that is what the [media](https://inleo.io/@leoglossary/leoglossary-media) portrays.  However, these assets are also used to reduce [risk](https://inleo.io/@leoglossary/leoglossary-risk).


A final benefit is that institutions can enter the arena.  They are often prohibited from dealing in the underlying asset.  With [cryptocurrency](https://inleo.io/@leoglossary/cryptocurrency), there are often custody issues.  WIth a future contract, this is traded like any other financial product.  There also tends to be more [volume](https://inleo.io/@leoglossary/leoglossary-volume) with the [futures market](https://inleo.io/@leoglossary/leoglossary-futures-market).


## Will This Help HIVE





The answer to this is mixed.  


There is no direct correlation between the price of HIVE and the futures contracts.  Having this available does not mean more [buy](https://inleo.io/@leoglossary/leoglossary-buy) demand for the underlying asset.  


Some futures contracts do settle with delivery.  Most [commodities](https://inleo.io/@leoglossary/leoglossary-commodity) operate in this manner.  At the end of the futures contract, the seller delivers the grain (or whatever) to the buyer.  


With these contracts, we are likely dealing with [cash](https://inleo.io/@leoglossary/leoglossary-cash) [settlements](https://inleo.io/@leoglossary/leoglossary-settlement-financial).  That means no HIVE is purchased to establish the contract.  It is simply another layer operating on top of the [coin](https://inleo.io/@leoglossary/leoglossary-coins).  It is a stark difference from the [Bitcoin](https://inleo.io/@leoglossary/leoglossary-bitcoin) and [Ethereum](https://inleo.io/@leoglossary/leoglossary-ethereum-blockchain) [ETF](https://inleo.io/@leoglossary/leoglossary-exchange-traded-fund-etf) which actually have the underlying assets custodied.


Indirectly, this is a helpful move.   As stated, there are a number of benefits for traders that could make HIVE more appealing.  While traders will simply use the futures contracts as the vehicles, if could stimulate some buying for those who want long position.


Also, the potential entry of institutions is always a benefit.  Even though they are not likely to buy HIVE, over [time](https://inleo.io/@leoglossary/leoglossary-time), this could help with the exposure it receives.


To check out the trading pair (HIVE/USDT), click [HERE](https://www.binance.com/en/futures/HIVEUSDT).


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<center> [What Is Hive](https://inleo.io/@leoglossary/leoglossary-what-is-hive) <center>




Posted Using [InLeo Alpha](https://inleo.io/@taskmaster4450/binance-adds-hive-futures-contract-ehx)