The term crypto sniping has gained attention recently, especially in discussions surrounding the LIBRA collapse and meme coins inspired by Changpeng “CZ” Zhao’s dog. This high-speed trading strategy, often executed using automated bots, allows traders to exploit price inefficiencies and capitalize on newly launched tokens before the broader market reacts.
What is Crypto Sniping?
Crypto sniping is a rapid trading technique that relies on specialized bots or sniping tools to monitor blockchain activity and execute buy or sell orders within milliseconds when an opportunity arises. These bots analyze the mempool—the area where unconfirmed transactions wait to be processed—to predict upcoming price movements before regular traders can react.
Common Crypto Sniping Strategies
Several sniping strategies exist, each targeting different aspects of market inefficiencies:
- Token Launch Sniping – Bots instantly buy newly launched tokens at low prices before demand drives them up.
- Liquidity Sniping – Traders monitor tokens for liquidity increases, executing trades when conditions are favorable.
- Arbitrage Sniping – Taking advantage of price differences across exchanges, bots buy from one platform and sell on another for profit.
- Cross-Chain Sniping – Bots execute simultaneous trades across multiple blockchains to exploit market inefficiencies.
- MEV Sniping (Maximal Extractable Value) – Bots reorder transactions within a blockchain block to gain an unfair advantage, commonly seen on Ethereum and similar networks.
How Crypto Sniping Affects the Market
Crypto sniping has a major impact on price volatility, often mimicking pump-and-dump schemes. The high-frequency nature of these trades rapidly drives prices up, but they can also cause abrupt crashes, leaving retail investors at a disadvantage.
Positive and Negative Effects of Crypto Sniping
✅ Enhances Liquidity – Increased trading activity can improve liquidity, making assets easier to buy and sell.
❌ Creates Unstable Prices – High-frequency trading can cause sudden price fluctuations, making it difficult for average traders to enter or exit the market.
❌ Favors Insiders and Bot Users – Traders using sniping bots gain an unfair edge over retail investors, who often buy in at inflated prices after the bots have secured early profits.
Real-World Examples of Crypto Sniping
LIBRA Memecoin Collapse
According to Bubblemaps, an insider sniped LIBRA tokens at launch and made $6 million in profits. The insider reportedly used their early access knowledge to buy tokens at low prices, cashing out before the wider market could react.
The LIBRA memecoin collapsed on February 15, losing $4.4 billion in market cap within hours.
Broccoli-Themed Meme Coins and CZ’s Dog
A similar case happened with Broccoli-themed tokens on Four.Meme, a collection of meme coins named after CZ’s pet dog. A trader used sniping techniques to acquire 50% of the total supply upon launch, making $10 million in profit before the tokens crashed.
The Future of Crypto Sniping
While crypto sniping remains a controversial yet lucrative strategy, its impact on market fairness is raising concerns. Regulators and blockchain developers are exploring ways to counter sniping bots, but for now, retail investors remain at a disadvantage in markets dominated by high-speed algorithms.
As crypto markets continue evolving, traders must remain vigilant, understanding the risks posed by sniping strategies and ensuring they do not fall victim to manipulated price surges.
