Small capital basically makes it difficult for you to diversify your portfolio( you are not able to buy many tokens). this may lead to buying a few tokens and this comes with a comparatively lesser probability of success as compared to a large capital. Also the profits from small capital are very minimal so growth of the initial investment become difficult.
A small capital does not need to be diversified at all, the point of diversification is to protect your portfolio and if you have a small amount of capital then you do not have a lot to protect, in fact when you have a small amount of capital you need to do the opposite, you need to take greater risks if you want to earn any kind of meaningful profits out of the market.