Bitcoin (like gold since the gold standard ended) is just a "check" on Fiat currencies and can act as insulation from central banks that issue too much money too quickly.
Fiats will continue to exist alongside bitcoin/cryptos, they'll just eventually have to "compete" a bit more (i.e., not be printed so readily by gov'ts) or else they'll become significantly less relevant.
Bitcoin is like a decentralized banking system with no controls at all against a systemic bank run. No FDIC or Fed.
It has been small enough that a single Billionaire could bail it out when it got into trouble.
Once you hit the point where it'd take > $10B's to bail out Bitcoin it is going to unwind eventually in a bank run/panic.
This time is not different, and those who fail to understand the past are doomed to repeat it.
And its driven at this point by greed and "number go up".
And the reason why people like it is that they put $10 USD fiat in one day and draw out $100 USD fiat some time down the road, and its that ability to extract fiat from it that it is tied to. It isn't any kind of alternative. Everyone watches how much it climbs in USD denominated terms. Nobody remembers "1 BTC = 1 BTC" even as a joke any more.
Bitcoin is also extremely easy for the vast majority of the population to quit. You don't need it to buy groceries, you don't need it to pay your mortgage or your taxes. When the supply of $USD in the system goes to zero and the price collapses from a large enough height, there will not be any floor to it.
It seems to me you've not thought through the game theory of banning cryptocurrency very much.
There's an immediate competitive advantage (in the form of increased business activity & tax revenue) to the first country to adopt clear, consistent rules regards CCs and their use. If a few big countries try to ban it, that competitive advantage becomes even stronger for any country willing to buck the trend.
For one thing I said there are good reasons to completely ban cryptocurrencies. For another I didn't even say there aren't any good reasons against it.
Your reasoning is faulty, because you underestimate the ability of countries to cooperate. The US could probably even enact a virtually global ban on its own. Yes, some countries could try and resist, or some companies (and criminal organizations, of course) but they would be instantly limited to a much smaller market.
The only thing nations would have to do is make the interface between the Bitcoin economy and the rest of the economy illegal and too cumbersome. Bitcoin wouldn't die, but it would crash hard.
>you underestimate the ability of countries to cooperate
you,handwaiving all 190+ nation states will go along with AND have incentive to do what the all powerful US says...
OKAY, buddy...
Also, and please be honest with yourself, would you like to live in where the US unilaterally decides what private property rights should exist and not? I sure as heck hope you don't want that future.
The US does this all the time with its monetary sanctions. That's why sanctions against Iran and Russia are quite a big deal for these countries. Even nations that don't really want to take part in those measures are affected because their national banks have to do business in the US or with US banks and businesses.
Bitcoin (like gold since the gold standard ended) is just a "check" on Fiat currencies and can act as insulation from central banks that issue too much money too quickly.
Fiats will continue to exist alongside bitcoin/cryptos, they'll just eventually have to "compete" a bit more (i.e., not be printed so readily by gov'ts) or else they'll become significantly less relevant.