The dollar dying doesn’t make Bitcoin win

The rapid decline of the U.S. dollar has reignited dreams of “hyperbitcoinization” among Bitcoin proponents. But there is little evidence that the dollar dying means Bitcoin’s victory; and plenty that points toward widespread chaos instead.

The dollar dying: lessons from currency collapse

Fernando Nikolic, ex-VP at Blockstream and a veteran of Argentina’s financial turmoil, cautions against Bitcoiners wishing for the death of fiat:

“Bitcoiners celebrating dollar collapse don’t understand what they’re asking for… It’s not liberation, it’s your grandmother eating cat food because her savings evaporated… The dollar dying doesn’t make Bitcoin win.”

In times of true currency collapse, basic necessities like ammunition (not digital assets) become the only thing of real value. Many Americans imagining a sudden transition to a Bitcoin-based economy have no experience of genuine societal breakdown.

The reality, Nikolic warns, is far more chaotic than they realize, and they would not actually welcome the outcome of the dollar dying they’re envisioning.

A bleak picture across the U.S. points to a straining fiat system

The American housing market has never been more out of reach. Median home prices hit record highs in 2025, requiring twice as much income to buy a single-family home as in 2019.

US Home Price Histrory: 1890 to 2025 (Source: Re:venture)

The price-to-income ratio is at an all-time high, with ownership less attainable than ever, and millions of renters spending between 30% and 50% of their income on housing.

The mismatch between wages and rising housing costs means most would-be buyers are priced out, worsening social stress.

Adding salt to the wounds, U.S. unemployment edged up to 4.3% in August 2025, the highest since late 2021, with broader underemployment at 8.1%. These figures mask the pain caused by a labor market that can’t keep pace with inflation or stagnant real wages.

Against a backdrop of rising unemployment and climbing house prices, the U.S. national debt breached $37 trillion in August 2025, more than double the size of the nation’s total economic output.

Borrowing costs are rising, with interest payments now surpassing even defense spending. Congressional Budget Office projections say the debt level reached this milestone five years ahead of schedule, largely due to pandemic borrowing and expanded social spending.

Debt growth at $1 trillion every five months is unsustainable, risking upward pressure on rates and crowding out investment.

When fiat fails, Bitcoin doesn’t automatically win

The dollar index dropped more than 10% against major currencies this year, the steepest decline since 1973. The drop is linked to unpredictable economic policies, protectionism, and expansive tax cuts.

As the dollar falls, import prices rise, eroding purchasing power for ordinary Americans, worsening inflation, and straining family budgets. The depreciation further pressures housing, jobs, and debt, compounding systemic fragility.

All these stark metrics paint a dismal picture of the plumbing beneath the American economy, broadly considered a barometer for the rest of the world. If, arguably, one of the world’s strongest currencies is under strain, what does that spell for the entire fiat system?

While many Bitcoin advocates chant, “Bitcoin fixes this,” hyperbitcoinization (the idea that people will turn en masse to Bitcoin when fiat fails) is a dangerous fantasy. It ignores history and social reality. When currencies collapse, trust evaporates, and basic survival needs replace abstract ideals.

Nikolic’s testimony, rooted in Argentina’s fiat collapse, exposes hopes for “liberation” as naive: collapse means poverty, instability, and suffering.

Financial chaos hits the vulnerable hardest, as social safety nets and market norms disintegrate. Bitcoin may offer an alternative to inflationary fiat, but the dollar dying won’t bring freedom, but disaster and misery for most.

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