I don't see diversification as a good practice in this crypto space because aside Bitcoin, their is no other crypto that is as reliable as Bitcoin, because Bitcoin has proven beyond reasonable doubt that it always recovers even when it dips in price, so it's safe to invest in Bitcoin only.
But if you are hell bent on diversification, then it should only be considered when you have gotten to that over accumulation status, and you should not be diversifying into alt or shit coin, but you should be diversifying into land or real estate, so you must get to that over accumulation status first before thinking of diversifying, if not, it's a wrong way to invest in Bitcoin.
Why should a person diversify his investments? Of course, to keep his money safe and to earn profit from it.
Where Bitcoin is able to fulfill both his needs, then is there a need to diversify his investments?
Especially for those who have just started investing in Bitcoin, the first priority should be to hold as much Bitcoin as possible.
Yes, when he reaches his needs, he can invest some money in other sectors along with buying Bitcoin. That investment should also be Bitcoin-centric.
His aim should be that he can always buy Bitcoin with the amount of profit he earns from there.
It is like this - person "A" has invested in a place from which he is getting a good amount of profit every month.
As long as he is able to work, he can meet his basic needs with the money he earns through his job/business, add the remaining money to the profit received from the investment, and increase the flow of buying Bitcoin by investing in Bitcoin.
Again, when he retires, the profits from these diversified investments will be able to meet his initial needs, so his invested Bitcoins will be protected.
So whether you support it or not, I think at some point, in addition to investing in Bitcoin, we should make a diversified investment that will later provide protection to our accumulated Bitcoins.