Forget the Bitcoin price! Here’s how I’ll use FTSE 100 stocks to try and make a profit

Bitcoin is definitely a year to forget in 2022. From starting the year at around $47k, it lost more than half its value to finish the year below $20k. Although some FTSE 100 stocks also suffered heavy losses, very few have comparable performance to cryptocurrency. So when looking at investment options for 2023, that’s why I prefer stocks over crypto.

Yield potential

Bitcoin does not pay me interest for holding it, in the same way I can also receive interest from having cash in a bank account. Although stocks do not pay interest, some pay regular dividends. This means that I can generate income from owning stocks.

This may seem like a small difference, but it really helps me, especially this year. I can’t say for sure how the global market will do. It is possible that the stock I bought fell in value. But by taking dividends along the way, I can still make a profit.

For example, let’s say I want to buy shares in a miner Rio Tinto. It is currently yielding a 10% dividend. If the dividend payout stays the same next year, but the stock price drops 5%, I’ll still end up with a 5% overall profit for the year.

Obviously, there is no guarantee of future income payments. But it shows how I can use selective stocks to generate cash next year.

Proven track record

Bitcoin was created back in 2009, according to various sources. They have a brief history and bright future possibilities. Insight is one of the reasons I have some Bitcoin!

But I see value in owning blue-chip stocks that have been around for decades. These companies have survived whatever economic conditions they have faced. This gives us confidence that whatever happens in 2023, the company can handle it. Not only that, but investors will be happy to buy shares in the process.

There are countless examples in the utilities, banking and consumer sectors. In fact, there are 19 stocks that have been in the FTSE 100 since its inception in 1984. I think you can make a profit from owning these stocks because they replicate past performance.

Of course, past performance does not guarantee future returns. But it definitely gives me an idea of ​​what to expect.

FTSE 100 shares in my portfolio

I don’t want to be seen as ignorant of cryptocurrency. But when I’m trying to find a home for the majority of my investable cash, I think it’s wiser to forget Bitcoin and focus on FTSE 100 stocks. This is based on higher yields from dividend payments and lower risk due to selective business history.