- James Putra, a 15-year fintech veteran and trader, oversees product strategy at TradeStation Crypto.
- Putra told Insider why he thinks ethereum could outperform bitcoin in the next 6 to 12 months.
- He also shares the 2 altcoins in his portfolio, including how he mined 40,000 dogecoins by accident.
James Putra landed his first job out of college as employee number four at a trading software startup.
“It’s probably the best and the worst thing you can do to a 24-year-old because you think everything’s so easy after that,” Putra told Insider at the Chicago Trading Show.
Of course, nothing is easy in the highly competitive trading business, but Putra’s early start in fintech – prior to the birth of bitcoin in 2009 – has given him a unique advantage in identifying and betting on the next emerging and potentially explosive asset class.
After leaving the startup, he helped build a foreign exchange trading business for E*Trade. In 2013, he joined TradeStation to help launch the firm’s Japanese equities trading business. In 2014, when the opportunity to launch a crypto trading division came about, Putra jumped on it.
In order to learn everything about crypto, he started mining digital tokens. In mid-2016, as excitement began to build around bitcoin’s raging bull run, the coins that his team had accumulated became very valuable suddenly.
“I was in the right place at the right time,” he said. “We had done all this mining stuff with crypto, we had built up the expertise.”
His crypto portfolio: bitcoin, ethereum, and 2 altcoins
Despite being an experienced FX trader, Putra, who now serves as the vice president for product strategy at TradeStation Crypto, refrains from trading crypto himself.
“I learned in the first three years of trading crypto that this is not an asset class for me to trade. I bought a lot of ethereum at $20 and sold it at $40,” he recalled. “I thought I was an amazing trader and it was a great trade. If I had just held on to it, I would have been in a much better position.”
Putra believes that there are skilled traders who can generate outsized gains by getting in and out, but his memories from the ethereum trade are a constant reminder for him to stick to the buy-and-hold strategy.
His investment portfolio consists of 90% to 95% in bitcoin (BTC), which serves as a “long-term collateral base.” His second-biggest position is ethereum (ETH) based on the potential of decentralized finance and ethereum 2.0‘s staking capabilities.
Putra said he is not an intentional bitcoin maximalist but he lacks the time to conduct the necessary due diligence on the thousands of altcoins in the crypto universe.
The two altcoins he does possess are acquired more or less by accident.
During his crypto-curious days, Putra was trying to mine litecoin with a friend to learn more about crypto. He had bought some application-specific integrated circuit (ASIC) miners and turned on a setting he didn’t exactly know how to use. A couple of days later, he ended up with 40,000 dogecoins (DOGE), which, like litecoin, are a type of scrypt token.
Another altcoin Putra holds is helium (HNT). After hearing about the easy and noise-free mining experience from a friend, he went out and bought a router-like hotspot that is needed to mine HNT tokens.
“I never got a receipt or email confirmation. I thought I got robbed or it was just stolen. Six months later, this package showed up at my door and it’s the router,” he said. “I plugged it in. Within a week, I had made close to $7,000 on helium.”
While it’s still an early and unproven technology, Putra said he likes helium because he is bullish on any asset that miners or investors can run as a side hustle to sell their excess resources. In the case of helium, the network, which allows low-power Internet of Things devices to send data over the internet, gives miners an opportunity to sell their excess WiFi.
Ethereum – an undervalued asset driven by supply shortage
Looking ahead, Putra is excited about the performance of ethereum.
He noted that while bitcoin started the year accounting for roughly 70% of TradeStation’s trading volume, ethereum is now almost 70% of its trading volume today.
“In my personal view, ethereum looks very cheap,” he said. “When you look at the supply shortage versus the demand, more and more ETH is being locked up into the ETH 2.0 staking nodes. There’s a very small percentage of ETH that’s even available for people to trade, so that just drives a supply shortage.”
“In the next six to 12 months, I think ETH has a strong likelihood of outperforming bitcoin just because of this supply shortage,” he said.
However, after ETH 2.0 comes out, he “would not want to be holding ethereum for the near term” because a lot of people will now have access to sell ETH 2.0.
“Once we’ve crossed that pathway in staking and ETH 2.0 is live, you have a 45-day redemption window where you can pull your assets out of staking, and liquidity becomes available to the market at that point,” he said. “Whether people sell or not is unclear, but it changes the idea that there’s a supply shortage.”
As a result, individual traders should keep a close eye on the release dates of ethereum 2.0, which could mark a fundamental change to the dynamic of an ethereum supply shortage, he added.