I don't see the dollar collapsing. The Pound Sterling was once the reserve currency. It lost its status. It is still in circulation. The UK was crushed by WW2 debts, which they only recently paid off.
I think the US is in the same boat. We will likely lose our reserve currency status as the world switches to BTC. That will come with other side effects, such as the uselessness of SWIFT as a lever to impose US law on foreign banks. Without dependence on the dollar, foreign countries will have a bit more control of their own affairs. Perhaps one day our government will figure out how to pay off the national debt in 70 years.
Even so, I also don't see BTC becoming a transactional form of money, at least not for everyday expenses. There are other cryptocurrencies that are better suited for that type of transaction. You are right that people are buying BTC to hodl and collateralize rather than to spend.
In my mind I picture what is coming like a transmission with BTC being the overdrive gear you use for cruising speed. It is inadequate for taking off from am full stop. Other cryptos can serve as first and second gears as they are quickly and easily tradeable with low fees and fast transaction times. But, if you really want to get your wealth going, you need BTC as your top gear. Perhaps I'm belaboring things. Fiat could be first gear, and spendy cryptos could be second gear.
My analogy is tapped out. I'll stop now.
The advantage the USD has is multiple. Many of the physical dollars, the majority in fact, are outside the US. Also, there is trillions of dollars in debt that was written in USD that is going to be out there another 30 years. I think the Fed could insulate the USD by issuing 50 and 100 year bonds.
Finally, for all its faults, and they are many, the US banking system still is the most advanced. Until this is usurped, I think it is tough to challenge the dollar on a global scale. Even today, not only are major international deals done with US banks, most are headlined by one.
This will only get more tilts as the European banking system starts breaking down.
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You're right about the 50 year and 100 year bonds. I suppose I tend to think about things within my lifespan. A country does not have to think in such limited terms.
I suppose that gives time for the euro dollars to start winding down to whatever comes next. I also agree that the Euro is not a viable alternative for a reserve currency. I think China will have a go at becoming the reserve currency; but, I don't think it will take off the way the CCP thinks it will.
I covered this in my latest video.
The problem I see with China is the fact that they have trust issues on an international scale. The numbers are hard to trust coming out of China.
Plus, what do we truly know about their banking system and how solid it is?
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The US dollar will eventually lose its dominant position in the international currency system one way or another. It will happen regardless of Bitcoin.
Bitcoin will stabilize and mature at some point. Maybe it will become the politically neutral dominant reserve currency of the world. The world is destined to become much more multi-lateral than it currently is. The US will try and cling to its power and China seems to be building its own power base. I find it unlikely that the countries of the entire world will agree to let any single party dictate the rules of the financial world, if they have choice. Increasingly, they will have choice as their economies grow, which will happen owing to the simple fact of there being so many low hanging fruit to be picked.
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What are you smoking?
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I don't smoke, normally. If I'm drinking, maybe some Marlboro Lights.