So Bitcoin is designed so that the value of it will increase over time as opposite to traditional money in which the value of it will go down. But won't that make it more like gold instead of actual money?
By the prices of stuff going up in traditional money, it encourages keeping the goods and trading them, for example if someone owns a house that house's value won't just go down with time, it can go through time. But if goods were to keep getting lower in prices then it can as a result discourage buying them and trading. Which makes Bitcoin unusable as money. To keep your money safe of course you can store in a bank as they give you a small amount of interest.
Bitcoin has a limited supply and as time goes by and its popularity increases the prices can go higher and higher, making it less effective to be used as usual money. Imagine how would a shop keeper feel as their good will only decrease in price. And like traditional money which has banks Bitcoin doesn't offer much solution to this.
So even if bitcoin prices were to stabilize, wouldn't it be more like gold than a currency to use like traditional money? Gold is very similar in those terms to Bitcoin.
Bitcoin is not engineered to appreciate in value. It's supposed to hold its value in the long run.
In that case, then yes, bitcoin has many characteristics that gold also has as a store of value. The nominal value of bitcoin may go up in the long run but I believe that the purchasing power should remain relatively the same due to the fact that fiat is constantly depreciating.
And even though bitcoin is always inflationary, you're right about the fact that it'll reach deflationary status at some point due to lost coins outweighing the speed of new coins being minted at. I also agree with the fact that bitcoin is unlikely to replace fiat currency, but rather be used as an alternative and potentially serve a niche market of people who want to facilitate global transactions or simply want a safe haven to store wealth in. But I disagree that bitcoin can't be used as a currency simply because its supply is capped, I don't see that as a barrier.