What if the bitcoin supply, along with its use as a substitute for money for transactions, became so prolific that it started to rival a true currency?

Not gonna happen. According to the FED SHED survey, the percentage of respondents claiming to use bitcoin for any payments has declined from 3% to 2% over the past four years. That’s not a percentage of all payments but rather a percentage of respondents reporting they have used crypto as a payment at sometime. The actual volume of crypto payments would be much smaller.

I conclude that this suggests the original enthusiasm for crypto as money among even the early adaptors is fading, and that it’s only functional is as an imaginary store of value. Once this shared hallucination shatters, crypto will fail catastrophically. Without functioning as a means of exchange, and without having the benefit of being a tangible physical commodity that can be hoarded, bitcoin cannot even function as a store of value in a time of crisis. The recent inverse movement of bitcoin relative to gold reflects this decoupling of bitcoin from gold as a value safe haven.

The one thing that could save bitcoin is a political shift to the left in which a progressive government targets the billionaire class for a wealth tax. Crypto offers the wealthy a way to “offshore” their wealth and avoid expropriation.