Yes, it is not a must, you are right. Many investors are having different misconception on diversification and over accumulation. The reasons for diversifying can differ to another investor. The same thing goes for over-accumulation.
After investing in Bitcoin, which i think should take over 50% of your total portfolio, it is also good to diversify, I will recommend low risk asset that can give you profits yearly. It should be an investment that helps protect your bitcoin investment from tampering it.
I disagree because diversification doesn’t always reduce risk the way people think it does. Many assets people diversify into.....stocks, equities, even some bonds....often fall at the same time during market downturns. So when Bitcoin drops, those assets may also be down, meaning there’s no real “balance” happening. That creates a false sense of safety. Also, volatility alone isn’t real risk if you understand what you’re holding. Bitcoin’s price swings are normal, and reacting to dips by diversifying can be more emotional than strategic.
Another issue is spreading money too early. If someone has a clear Bitcoin target and strong belief in it, dividing funds before reaching that goal can slow down real accumulation. Concentration is often how wealth is built, while diversification is better for protecting wealth after it’s built. On top of that, many people don’t truly understand stocks, bonds, or other traditional assets either....they just assume they’re safer. Diversifying too early can also mean moving money away from a high-growth asset too soon, which comes with a real opportunity cost.
Even if you believe diversification does not always reduce risk the way people think it does, it is still necessary for people to diversify their investments into stock or bonds if they have reached the stage of over accumulation so that when there is a downturn in the Bitcoin market, their investments in either stock or bonds will come to their aid while they patiently keep holding their Bitcoin till the year they will decide to sell it. Diversifying your investment when you have not reached over accumulation in Bitcoin investment is very unwise because it will delay you from accumulating a reasonable amount of Bitcoin since you will be using your discretionary income on different investments. So to succeed in reaching over accumulation in Bitcoin investment, we should focus only in Bitcoin investment, and we can think about diversifying our investment when we have reached over accumulation on Bitcoin investment.
