Diversification only on the stock market isn't a good idea. It doesn't protect against the insurers going bust, for instance. In this case, keeping some % of net worth in a cryptocurrency makes sense, just like keeping a few gold bars/coins or an emergency stack of bills makes sense for that day when the internet is broken.
>It doesn't protect against the insurers going bust
Can you clarify? I mean, I agree that your diversification should extend beyond the stock market (bonds, some metals, real estate). But I'm not sure what you mean by the above.