What Is the Concept of ‘Delivery Squeeze’ in Commodity Futures and Can It Apply to Crypto?

A delivery squeeze occurs when a large buyer of a physically-settled contract demands delivery of the underlying commodity, but the sellers struggle to procure the physical asset. This can artificially inflate the price of the commodity in the spot market.

While less common in highly liquid crypto, a similar situation could theoretically occur if a major physically-settled exchange had a limited supply of available crypto for delivery.