Can You Solve this Ice Diamond Riddle? ft. Vsauce’s Michael Stevens

Archimedes principle.

Assuming the ice and diamond float the ice and diamond will increase the water level by a certain amount, it will stay at exactly that place as the ice melts as the decrease in volume will be balanced by the increase in density.

If on the other hand there is enough diamond to pull the ice cube under, the water level will drop as the ice cube melts and reduces in volume.