There is no current alternative to replace Bitcoin and that is because Bitcoin hasn't failed yet. There are several hundred coins lined up to try take that position though if Bitcoin ever does fail. The crypto economy can survive without Bitcoin but I think a lot of confidence would be lost at that time, although a recovery to me would seem inevitable.
Yes, bitcoin is so popular and its demand is rising. It is one of the reason why the bitcoin is so expensive compare to the other altcoins. Bitcoin is considered as the father of new currency and currently that is the goal of the bitcoin.