Op diversification of investment is good. It is good to invest on those coins that have potential in the future. And one has to make a good choice to plan. All coins can not come up or rise up at the same time. Bitcoin is leader of all the cryptocurrencies and people are investing in it because of it value and they start their investment in the time when the price is low in the bear market and sell it when the price is rising.
The problem with investing in most of these altcoins is that it's difficult to know a coin with the future potential as you stated. Most coins are just hyped by influencers and the developers will claim that they wealth of experience and will come up with a well-written whitepaper. But in the end, it will end up becoming a scam. But some people are comfortable with the risk of investing money in them. Some will be fortunate to gain while others will lose money.
Diversifying into different projects is a good one but people shouldn't be carried away into fake projects that will make them to lose money. People really need to study what they are investing on to be sure if if it is worth investing. Instead people will go what they are not sure of that can make them to lose money at the end of the day it is better to just stick yo bitcoin investment which we all know how reliable it is in the market. For me it is very important for bitcoin to always be the first option as an investment for people.
Diversification in the crypto space is okay but after investing in Bitcoin I prefer to diversify my investment to other areas. Real estate, stock, gold, etc are some areas I might consider. There are some food altcoins but I prefer to stick with Bitcoin because it is stable and reliable.