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.