Diversifying is not investing in multiple coin and you think you have diversified. What happened when the market goes into a bearish market and it last for years just like the previous that started 2018 and lasted until 2020 before the bulls came around again. Diversifying is recommended by investing in different asset that are not related like the stock market and cryptocurency or real estate.
Putting all your money in the market is risky because this is a very volatile market and you need money. If you put in your spare then that is doable since you would not have to worry about the movement of the market since you already have money for your other activities and this is the best was if investing.
Diversifying by investing in multiple coins still works within that idea as well. Let's assume that you have 100k dollars, you invest 50k of that into crypto (because let's face it that's the best idea) and you buy a plot of land with 25k and then put 25k into either gold or stock or share it between them like 10k to 15k or whatever. Is it over? You just put 50k into "crypto", what did you put it in? Did you put that all on bitcoin? If so then that is a big mistake because you didn't diversify it at all.
You need to buy few coins in order to diversify inside the diversification, go ahead and buy other stuff with your 100k and not all, but do not put all your crypto portfolio into just one neither, have like 5-10 different coins and you will be better. This works with stock market too, try to avoid investing into just one company and invest into multiple stocks. That way you have like 10 companies invested, 10 crypto coins that you invested, one plot of land with future potential, and some gold. That would be awesome.