How to Spot the Next Celsius Before It’s Too Late

cryptonews.com:

It’s every crypto investor’s worst nightmare, depositing money with a platform that later goes bust, making it all but impossible to recover funds. It’s also bad enough investing in the native token of any such platform, the collapse of which will send that token plummeting to Earth like a lead balloon.

This nightmare has already been realized on more than one occasion during the current bear market, with the collapses of Terra and Celsius leaving more than a few investors out of pocket. Yet while we can all point retroactively to how dangerous such platforms and their business models were, spotting the ‘next Celsius’ before it collapses is certainly a big ask.

However, a number of crypto industry players affirm that, at least in the worst cases, there are a few telltale signs that reveal some platforms are exposing themselves to more risk than others. At the same time, a diversification strategy always remains a sound policy, since predicting the next collapse in a highly interconnected market isn’t always possible.

Pretty much every commentator is in agreement as to the primary telltale sign of vulnerable platforms: unusually high yields. Yes, Celsius and Terra (via the associated Anchor Protocol) offered yields that seemed too good to be true, or rather, too risky to be true for long.

“At the very least, Celcius displayed a woeful lack of due diligence in lending vast amounts of depositors' money to highly speculative ventures. But the way it made such lofty promises of high returns to sign up and lock away their money had many hallmarks of a giant Ponzi scheme,” said Susannah Streeter, the senior investment and markets analyst at Hargreaves Lansdown.

Streeter advises that speculators should treat incentive schemes that