The problem being discussed is not the difficulty of asset diversification. Lest you forget:

> People who are unable to discern scam from not scam get scammed.

This is a common refrain, along with Do Your Own Research (DYOR). As if scams are that obvious.

However, my additional point was that I have successful crypto friends, that actively and knowingly invest in shitcoins and justify it as “money they can afford to lose”.

Also, just to be clear - are cryptocoins an investment, a store of value, a currency, or equity-equivalent in a company? Because the goal always seems to be buying enough of every coin to maximise speculative windfalls. That is /strictly/ not the goal of a traditional index fund.