Why “Crypto” Isn’t One Asset — And Why That Matters

A genuinely important corrective for newer investors appears in Chapter 88 of Felix Bick’s How Not to Get Scammed by AI Trading Apps: the common but mistaken habit of treating “crypto” as a single, monolithic asset category.

Bick establishes the general diversification principle first: diversification, spreading investment across different asset types, sectors, and strategies, reduces the impact of any single investment’s failure on overall financial wellbeing, and remains one of the most well-established, empirically supported principles in personal finance, applicable regardless of how sophisticated or technologically advanced any individual opportunity claims to be.

The chapter’s specific insight about crypto is genuinely important for anyone newer to this asset class: this principle applies not only across traditional asset classes but within categories often treated as monolithic by inexperienced investors. “Crypto” is not a single asset but thousands of distinct projects with vastly different risk profiles, and concentrating exposure in a small number of speculative tokens carries meaningfully different risk than diversified exposure across established, liquid assets.

Bick offers a genuinely useful personal check for evaluating concentrated positions: if unable to clearly articulate why a specific concentrated position is justified relative to a more diversified alternative, diversification is likely the more prudent default, regardless of how confident the case for concentration currently feels.

This chapter is a valuable reminder that many newer crypto investors think in terms of “being in crypto” as though it were a single decision, when in reality the diversification decisions within crypto — across established assets versus speculative small-cap tokens — carry enormous risk implications of their own.

For anyone building or evaluating a crypto portfolio, this chapter of How Not to Get Scammed by AI Trading Apps by Felix Bick offers an essential reframing of diversification within, not just across, asset classes.