i see this argument many time lately, but it's not right to think that all the money that are in the altcoin, are there just because they want more bitcoin, they are there because they think that bitcoin might collapse one day and they like to diversificate
I think there are several aspects that can play a role, but their validity depends upon the view one has on the fundamentals.
If crypto were essentially a currency, that is, stuff you use to buy goods and services, then I think that there would be a strong convergence to one single asset, because a currency gets more utility, the larger its user network is. This is what has been pretended about bitcoin since a long time. There would be a virtuous cycle, that makes that the bigger a currency user network is, the larger the chances are that you can use that currency for something you want to buy. As such, a newcomer would like to jump into the biggest network currency ; lesser networks would simply fade away. Also, as a merchant, you're most probably want to deal with the network that has most potential customers.
This argument is valid if the asset is essentially a currency, and if its market is essentially driven by people wanting to spend it as a currency. In fact, if this were true, there wouldn't ever be a serious alt coin, because it cannot compete with the first mover that has the largest network. This is what bitcoin fans consider as the ultimate proof that the only "true" crypto currency is bitcoin.
The problem with that argument is of course that bitcoin didn't turn out to be a currency, and this is entirely due to its monetary policy, which is designed for a huge deflationary spiral. A deflationary spiral makes that the value of the monetary unit rises so fast, that people want to hoard it, instead of spend it, and are going to use something else as a currency. In other words, a deflationary spiral turns a potential currency into a speculative asset. With bitcoin, and many other crypto, the design of the monetary policy, inspired by the sound money doctrine, is totally axed on being deflationary, with the obvious consequence of it not having a currency-driven market, but a speculation-driven market.
And
once we consider crypto not as a currency (mainly), but as a speculative asset, the market dynamics turns around. There's simply no way in which you can have an obvious, clearly defined market leader in essentially *equivalent* speculative tokens ; in fact, you are most likely to make huge speculative benefits if you invest mainly in the SMALLER tokens, because they can rise more. The bigger the network, this time, the smaller the possibility of steady big rise. A coin with a market cap can, as history has shown, easily rise from $100 million to a billion. If you catch it at $100 million, you have a 10-fold gain. It is harder for a 10 billion coin to rise to 100 billion.
In fact, you better speculate comparable amounts spread out over many coins. If you have $1000,- to play with, and you put $50 in the first 20 coins, chances are much bigger that you make a lot of money than if you put all of them on one horse.
But if all speculators do that, all these coins will rise to similar market caps. So once these market caps will be relatively high, they don't promise much gain any more. So your next $1000,-, you better spread them over the 40 biggest coins. If some of them fail, that will made up by those few that "rocket".
Etc.... and in the end, we will have many, many coins rise to a similar market cap order of magnitude.
So in as much as a currency usage would design one clear sole monopolistic market leader, a speculative token market will become more and more uniform.