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

In the ice cube, the diamond displaces its weight in water. Once the cube melts, the diamond displaces its volume in water. Since the weight of the water displaced when the diamond is in the ice cube is greater than the weight of the volume of water displaced by the diamond when the cube melts (because the density of the diamond is greater than that of water) the diamond exerts a greater boyancy force (recall archimedes principal) when its in the ice cube than when it melts, causing the water level to drop.