Diversification involves investing across a broad mix of digital assets such as Bitcoin, Ethereum, stablecoins and other tokens. By spreading your capital across different sectors like payments, smart contracts and privacy coins, you reduce exposure to any single asset and increase your potential for long‑term growth.
In addition to balancing large‑cap and emerging coins, consider allocating a portion of your portfolio to DeFi projects and yield‑generating protocols. Stablecoins can provide stability during volatile markets, while staking and lending allow you to earn passive income. Diversification should align with your risk tolerance and research into each project's fundamentals.