How bots manipulate the prices of cryptocurrencies

This year, the cryptocurrency market has grown exponentially, with a market capitalization of $440 billion at the time of writing. Bitcoin is the largest cryptocurrency, with a year-to-date increase of 1,500 percent and a daily notional value of pancakeswap sniper bot over $10 billion. How much of this trading, if any, can be attributed to actual human buyers, versus how much is automated?

As it turns out, bots may constitute a significant portion of short-term holdings. Worse, bot trading may be unrestrictedly manipulating the market, artificially inflating prices, and causing individual investors to overpay for their executed trades.

What are bots?

A bot is an automated trader that buys and sells on the short-term market automatically. Due to the fact that robots are preprogrammed to buy and sell without emotion in response to specific triggers, they are historically responsible for dramatic market crashes. The infamous 1987 Black Friday Wall Street crash, in which equities fell more than 30 percent in a single day, was caused by program trading — the first generation of robots that sold stocks automatically when their price fell below a certain threshold.