diversification does help to cover the losses in investment, but it would be nice if you also choose another investment, do not invest in bitcoin alone but you can also choose altcoin, you can also choose a gold investment, stock etc.
Well, you mean diversifying your investment in different forms? Like cryptocurrency, stock market, real estate and other? Not a bad idea, but we're talking about diversification of investment inside the cryptospace. And also, not all can cover losses, some even make it worse, if you choosed a wrong coin and another cases like if you bought 10+ coins, that would be too many to monitor and be updated anytime. Sticking to one or two coin is enough, for example Bitcoin and ETH, specially if your still new in cryptocurrency.