How Does the Cost of Carry for a Commodity Differ from That of a Cryptocurrency, and How Does This Impact Option Style?

The cost of carry for a physical commodity includes storage costs and insurance, while for a cryptocurrency, it primarily involves the opportunity cost of capital and potentially staking rewards or lending interest. This difference is relevant because high carrying costs can incentivize early exercise of American call options on commodities.

Since crypto carrying costs are often lower or involve income (staking), the incentive for early exercise is less pronounced than for physical commodities.