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It's not everyone that invest in shitcoin knows that it's not a good investment. Some new investors don't male research or are being misled by other shitcoiners to invest in shitcoin that it will be the next bitcoin. I was once a victim of investing in shitcoin in my early days in the cryptospace but as time passes on after a big loss, I didn't give up but continued with my research till I found bitcoin and my worries ended.
However, diversifying into shitcoin isn't the best after you have reached your over accumulation stage, because shitcoin is in the same line with bitcoin and bitcoin controls their prices as the one and only unique cryptocurrency. If you must diversify, it should be into a different asset entirely like bond, stock, shares, equity and cash equivalents. The reason for diversifying is to have other asset to put your funds into for more confidence, so that if one is not doing well, the other can make a balance.
The idea behind diversifying is to attempt to have assets that are not correlated to each other, and many of us recognize that shitcoins are dependant upon bitcoin for their performance, which means that they are correlated to bitcoin, even if many of the shitcoin proponents claim that shitcoins are not correlated to bitcoin.. They many times will claim that they are better than bitcoin, yet they are lying in their various talking points including their claims of the non-correlation between bitcoin and shitcoins.
So then anyone who invests into shitcoins for the purpose of diversifying should be asking themselves what are they getting by putting value into shitcoins, since they are correlated, that means that perhaps more volatility and more risk is added onto just investing into bitcoin.. and bitcoin does tend to out perform shitcoins, even though surely there can be short periods of times in which shitcoins will perform better than bitcoin.
I have been thinking about it but you just made it clear to me now because how would someone invest on something that still depend on something they have already (Bitcoin) it doesn't too make sense because even the shitcoins they are diversifying into doesn't even have one quarter of Bitcoin potential because when diversifying we should look for something that have great potential almost as that of Bitcoin. Yes there are period we see shitcoins doing well while Bitcoin will somehow be in constant state but we should know that this case or situation doesn't happen often ( once in a blue moon).