Hello cryptothief, i think from you first paragraph, we on thesame page in getting this discussion on this thread right as far as investment and diversification of investment are concerned.
Now, let us at look the definition of both, the port folio investment and the diversification of investment whether crypto or other types of investment.
According to investopadia, "An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit."
Portfolio Diversification is a foundational concept in investing. Main while, In finance and investment planning, portfolio diversification is the risk management strategy of combining a variety of assets to reduce the overall risk of an investment portfolio.
Additionally, in finance and investment planning, portfolio diversification is the risk management strategy of combining a variety of assets to reduce the overall risk of an investment portfolio. Portfolio diversification will lower the volatility of a portfolio because not all asset categories, industries, or stocks move together.
Finally, in other words, by owning a large number of investments in different industries and companies, industry and company specific risk is minimized. This decreases the volatility of the portfolio because different assets should be rising and falling at different times; smoothing out the returns of the portfolio as a whole. Thank you