The rapid decline in the US dollar has rekindled the dream of “hyper-bitcoinization” among Bitcoin supporters. However, there is little evidence that dying of the dollar means Bitcoin's victory. And instead, it points to widespread chaos.
The dying dollar: lessons from the collapse of currency
Fernando Nikolic, Blockstream's Ex-VP and Argentine financial turmoil veteran, is paying attention to Bitcoiner who wants Fiat to die.
“Bitcoiner celebrating the dollar's collapse doesn't understand what they're looking for… It's not liberation, her savings have evaporated, so grandmother is eating cat food… Dollar dies won't win Bitcoin.”
In an era of true currency collapse, basic necessities such as ammunition (not digital assets) become the only thing of actual value. Many Americans imagining a sudden shift into a Bitcoin-based economy have not experienced a true social disruption.
The reality Nicolic warns is much more confusing than they perceive, and they don't really welcome the dollar consequences they imagine.
Dark photos across the US point to a tense fiat system
The U.S. housing market has been less than ever out of reach. Median home prices hit record highs in 2025, and in 2019, they needed to earn twice as much to buy a single-family home.
Price-to-income ratios are the highest ever, and ownership is more attainable than ever, with millions of renters spending between 30% and 50% of their home income.
The discrepancy between wages and rising housing costs means that most buyers are priced and exacerbate social stress.
Adding salt to the wounds, the US unemployment rate was up to 4.3% in August 2025, the highest since the second half of 2021, with a wider range of underemployment at 8.1%. These numbers mask the pain caused by inflation and the labor market that cannot accommodate stagnant actual wages.
Against the backdrop of rising unemployment and rising housing prices, the US national debt violated $37 trillion in August 2025, violating the size of more than twice the country's total economic output.
Borrowing costs have risen, and interest payments are now outweighing defense spending. Debt levels reached this milestone five years before schedule, according to forecasts from the Congressional Budget Office.
Debt growth at $1 trillion every five months is unsustainable, rising to fees and congesting investments.
If Fiat fails, Bitcoin won't win automatically
The dollar index fell more than 10% this year against major currencies, the sharpest decline since 1973. This decline is linked to unpredictable economic policies, protectionism, and vast tax cuts.
As the dollar falls, import prices rise, eroding purchasing power for ordinary Americans, exacerbating inflation and straining family budgets. Depreciation puts further pressure on housing, employment and debt, exacerbating systemic vulnerability.
All these harsh indicators paint a disastrous picture of plumbing under the American economy and are widely considered barometers in other parts of the world. Undoubtedly, if one of the world's strongest currencies is tense, what does that spell spell throughout the Fiat system?
While many Bitcoin advocates “Bitcoin will fix this,” hyper-bitcoinization (the idea that people will turn towards Bitcoin when Fiat fails) is a dangerous fantasy. It ignores history and social reality. When currency collapses, trust evaporates and basic survival needs replace abstract ideals.
Nicolic's testimony, rooted in the collapse of the Fiat in Argentina, presents a naive hope for “liberation.” Collapse means poverty, instability and suffering.
Financial disruptions attack the vulnerable most strongly as social security nets and market norms collapse. Bitcoin may offer an alternative to the Fiat of Inflation, but dying dollars do not bring freedom, but they do bring disaster and misery for most people.
