The decline of the US dollar has sparked the idea of "super Bitcoinization," while historical experience suggests that this will lead to chaos rather than liberation.

As the US dollar index rapidly falls, Bitcoin supporters are once again warming to the fantasy of "hyperbitcoinization." However, the article warns that the collapse of the dollar will not automatically lead to the victory of Bitcoin, but instead may result in widespread social chaos and suffering. Experiences from Argentina's financial turmoil indicate that when the fiat system collapses, what people need most is not digital assets, but essential survival items. At the same time, the current harsh data on the US housing market, unemployment rate, and national debt also sound alarm bells for this potential crisis.

The Dollar is Declining: Lessons from Currency Collapse

The rapid fall of the dollar has reignited the dreams of "super Bitcoinization" among Bitcoin supporters. However, there is little evidence to suggest that the demise of the dollar means the victory of Bitcoin; on the contrary, there are numerous signs pointing to widespread chaos.

Former Blockstream vice president and seasoned expert on Argentina's financial turmoil, Fernando Nikolic, warned Bitcoin supporters eager for the death of fiat: "Those Bitcoin supporters celebrating the collapse of the dollar do not understand what they are asking for... This is not liberation, but your grandmother having to eat cat food because her life savings evaporated... The demise of the dollar will not lead to the victory of Bitcoin."

In times of a real currency collapse, basic necessities of life, like ammunition (rather than digital assets), hold true value. Many Americans imagining a sudden transition to a Bitcoin-based economy have not experienced a true societal collapse. Nikolic warns that reality is far more chaotic than they envision, and they would not actually welcome the consequences of the dollar's demise that they have imagined.

The economic difficulties in the United States highlight the pressure on the fiat system

The U.S. real estate market has never been so out of reach. In 2025, the median price of single-family homes in the U.S. reached an all-time high, requiring double the income of 2019 to purchase one. The price-to-income ratio has reached a historic peak, making homeownership more difficult to achieve than ever before, with millions of renters spending 30% to 50% of their income on housing. The mismatch between wages and the continually rising housing costs has left most potential homebuyers excluded, exacerbating social pressure.

Adding insult to injury, in August 2025, the unemployment rate in the United States rose slightly to 4.3%, the highest level since the end of 2021, while the broader underemployment rate was 8.1%. These figures mask the pain caused by the labor market's inability to keep up with inflation or the stagnation of real wages.

Against the backdrop of rising unemployment and soaring housing prices, in August 2025, the U.S. national debt surpasses $37 trillion, more than twice the total economic output of the United States. Borrowing costs are rising, and interest payments on the national debt have even exceeded defense spending. Forecasts from the Congressional Budget Office indicate that this debt milestone has been reached five years earlier than originally planned, primarily due to borrowing during the pandemic and increased social spending. A $1 trillion increase in debt every five months is unsustainable, which could lead to upward pressure on interest rates and crowd out investments.

When fiat fails, Bitcoin does not automatically win

This year, the US dollar index has fallen over 10% against major currencies, marking the steepest decline since 1973. This drop is related to unpredictable economic policies, trade protectionism, and large-scale tax cuts. As the dollar declines, import prices rise, eroding the purchasing power of the average American, exacerbating inflation, and putting pressure on household budgets. The depreciation of the dollar further pressures housing, employment, and debt, exacerbating systemic fragility.

All this grim data paints a bleak picture of the underlying pipeline of the US economy, which is often regarded as a barometer for the rest of the world. If one of the strongest currencies in the world is under pressure, what does that mean for the entire fiat system?

Despite many Bitcoin advocates shouting that "Bitcoin can solve this problem," the idea of "super Bitcoinization" (that is, when fiat collapses, people will turn en masse to Bitcoin) is a dangerous fantasy. It ignores historical and social realities. When currency collapses, trust evaporates, and basic survival needs replace abstract ideals.

Nikolic's testimony rooted in the collapse of the Argentine fiat reveals that the hope for "liberation" is naive: the collapse means poverty, instability, and suffering. Financial chaos hits the most vulnerable populations the hardest, as social safety nets and market norms disintegrate. Bitcoin may provide an alternative to inflationary fiat, but the demise of the dollar will not bring freedom, but rather disaster and suffering for the majority.

Conclusion

As the US dollar faces multiple challenges, discussions about "super Bitcoinization" reflect a profound dissatisfaction with the current financial system. However, the deep insights of this article remind us that a currency collapse is not a shortcut to a digital utopia, but rather a path fraught with uncertainty, pain, and chaos. Understanding this risk is crucial for Bitcoin supporters and the general public.