Diversification is often a misunderstood strategy, while in theory it can generate greater long term profits,
Generally speaking, diversification is not considered to be a strategy to "generate profits," but instead as a means to preserve value.
If you are considering and/or trying to use diversification as a means to generate profits, then you seem to be engaging in some kind of gambling (like a shitcoiner hoping that one of his shitcoin's hit it BIG). That's surely not either an investor mindset or an investor way of choosing his asset allocations.
edited
The reason for that first sentence is that in my many years of reading investing books and articles online, I have found, and probably you have done so as well, atempts to describe diversification as a strategy that could potentially outearn other strategies using a principle similar to indexing, arguments that seem weak to me, that is why I state that is the theory behind such claims and then I describe diversification for its real purpose.
However this begs the question, if an investor wants to diversify their portfolio what is the best way to do it? And this reminds me of this quote by Thoreau: “Read the best books first, or you may not have a chance to read them at all.” As I believe it applies to investing as well, if we were to suppose you were interested in holding 10 different kind of assets, which one should you prioritize? The one that you consider to be the best, there is no point on trying to accumulate those 10 assets equally when you do not have enough of the best asset on your list, so whether you consider bitcoin the top asset on your list of assets to hold or it is the next best asset still to be accumulated by you in enough quantities, more bitcoin needs to be accumulated relentlessly until your goals are achieved, and only then you can move on to accumulate other assets in an attempt to diversify your portfolio even further, as if things are not done this way, you may not have a chance to get enough of the best asset on your list if you delay things up.
I believe that you have the right conclusion in regards to starting out with attempting to invest in the best assets first - yet you get to your conclusion (and your recommendation) in a bit of an awkward way.
Welcome to my world.

edited
I suppose that part of my beef with the way that you are framing the idea of diversification wxa7115 comes from the fact that you seem to be suggesting that there may well be some representative samples of newbie investors who are coming into the consideration of investing into bitcoin in terms of thinking about several assets at a time (something like 10 assets), and surely your example of 10 assets seems almost ridiculous as a consideration,
I admit it was not really the most realistic example, however I think there are circumstances in which an unrealistic scenario can exemplify better the problem at hand, so while a newbie is very unlikely to consider that many markets and do so with full knowledge about what they are doing, the problem of what asset class to pick is more obvious the more asset classes are in consideration.
unless you were presuming some kind of normalcy that shitcoins might be on the table of potentially reasonable assets to diversify into... and surely I can appreciate that any representative newbie investor might potentially be torn in regards to investing into 3-5 assets rather than merely being in cash, but I doubt that it is even close to realistic that any newbie investor would putting themselves into a scenario of considering 10 potential assets from the start unless such newbie was inclined towards gambling with shitcoins (and labelling his gambling ideas as if that was a kind of investing). ..
Ultimately, even though I feel that I am disagreeing with some of your presenting of these ideas of diversification, it still seems that we are coming to some similar conclusions, even though I am getting some senses that part of the reason that you are framing the diversification dilemma in regards to 10 assets and some of your other ways of describing diversification, I get the sense that you are allowing ideas of shitcoins to get into your ways of thinking about bitcoin alternatives, and one of the main reasons that you gravitate onto bitcoin is that in the end, you end up concluding that bitcoin is better than the rest of the shitcoins, but there still seems to be some kind of pulling of the shitcoins into your ways of thinking about and presenting asset choices that might be available to presumptively newbie investors.. .. or maybe you consider your audience to go beyond newbies.. even though surely there are various kinds of newbies, yet it seems to me that we can still attempt to present our discussion points in regards to the more likely newbies who might end up either starting out with ONLY having cash or maybe they had been dabbling in some relatively straight forward investments, such as owning some stocks, some property and/or even having some assets in a business.. yet these variations of a newbie investor could still be considered as someone who might not have a lot of investments and/or savings and maybe even the more wealthy of newbie investors might still ONLY have less than a full year's of assets that are liquid in the various investment categories that they might be starting with when they start to contemplate whether and/or how to get into bitcoin.
This was my mistake, after rereading my post I can see how taking into account that this is a bitcoin forum the word asset may seem to imply that shitcoins are acceptable investment options, which they are not, so I should have actually used the terms markets, asset classes or non-correlated assets to describe other potential options for investment, which would have made clearer my intentions to anyone reading my post, so yeah, this is my bad.