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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.
Yes, it’s a foolish move for any bitcoin holder or investor to even have to think of diversifying into shitcoins, because in the first place that is not what diversification is meant to be in the sense that you are still stucked at doing the same thing and even doing it at a more higher risk of losses. In as much as diversification doesn’t eliminate risk totally, but it can help to manage the risks, but here in this aspect you as a bitcoin investor trying to bend into buying shitcoins, you’re increasing the risk instead of trying to manage it. And secondly these idea of investment is relative to each other which makes it no sense to be called diversification and even some of this shitcoins are dependent with the performance of bitcoins. It’s not a bad idea trying to diversify as a bitcoin investor, but when doing so, you need to do it in a different market entirely or something more physical such as estate or land, production of goods etc.