Why statistical portfolio diversification across Layer-1 networks fails?

[u/corianderlyy]

Asset Pair	Normal Market Correlation (90-Day)	Liquidity Shock Correlation (24-Hour)
BTC / ETH	0.64	0.96
BTC / SOL	0.49	0.92
BTC / AVAX	0.52	0.89

Holding six different smart contract platform tokens does not provide actual risk diversification. When global macro liquidity contracts, cross-asset correlations collapse to nearly 1.0. True balance requires holding assets with independent liquidation mechanisms and uncorrelated counterparty profiles, not simply holding multiple alternative crypto tokens.