The dream of turning a small investment into a fortune is a powerful lure in the crypto industry.
But for one trader, that dream turned into a nightmare in a mere 35 minutes as he incurred a staggering loss of $138,000 trying to “snipe” a newly launched coin.
Sniping Gone Wrong
“Sniping” refers to the practice of buying a cryptocurrency immediately after it starts trading on an exchange, hoping to capitalize on a quick price surge.
However, this strategy can be extremely risky, as demonstrated by the unfortunate trader. See below.
A Costly Miscalculation
According to Lookonchain, the trader withdrew 1,535 Solana (CRYPTO: SOL) tokens, worth roughly $138,000, from Binance in anticipation of a new coin, PUNDU, launching on the exchange.
The trader then used 1,485 SOL, presumably almost their entire holding, to buy PUNDU shortly after trading began.
Also Read: Justice Department Accuses Crypto Exchange KuCoin Of $5B Money Laundering Scheme
However, the price of PUNDU quickly dropped due to “sniper selling.”
This refers to experienced traders who buy a new coin listing with the sole intention of immediately selling it at a profit, often leading to a rapid price decline.
Panicked by the price drop, the trader sold all their PUNDU holdings but only managed to recover 764 SOL, resulting in a staggering loss of 721 SOL, or approximately $138,000.
The tale of this trader’s misfortune arrives at a critical juncture in the digital asset industry, as participants from across the spectrum are increasingly seeking knowledge and strategies to navigate the market’s complexities safely.
The upcoming Benzinga’s Future of Digital Assets conference, scheduled for Nov. 19, presents an opportune moment for both seasoned traders and newcomers to gain insights into effective trading practices, risk management, and the evolving landscape of digital currencies.
Read Next: Bitcoin Spot ETFs Stop Losing Streak: Is $100K Back On The Table?
Image created using artificial intelligence with Midjourney.
