Outerlands Capital says diversification is important when investing in cryptocurrencies. Despite the dominance of Bitcoin and Ethereum, the number of new projects is growing. Investing in a variety of projects can reduce volatility and improve risk and return. Diversification helps you capture the best performers among a variety of investments. A concentrated portfolio of a few tokens may not capture all the innovations in cryptocurrencies. Diversification does not mean being passive, it requires an active approach to portfolio management.