Yes Bitcoin can replace fiat money but in certain country not all over the world. Bitcoin is not accepted in every country due to some reason. Bitcoin is a decentralised currency due to which some government doesn't want bitcoin in their country. Its Decentralised nature affect the country economy and financial growth. Because of these reasons it is not replace fiat money. Bitcoin has also some  quality which help it to replace fiat money like its increasing market price and advantage in money transaction facility.