Because of the value of Bitcoin, people will hoard it,
Take me as an example. I will invest 20% of my salary in Bitcoin because I think Bitcoin is very valuable and I believe in Bitcoin, so I think Bitcoin is worth investing in.
But if you let me buy something with bitcoin, I will hesitate and pay with fiat currency first.
Although people can pay in any way, will Bitcoin be your first choice?
Now the difference between fiat currency and Bitcoin is that one is inflation currency and contraction currency. Inflated currency (fiat currency) means that if it inflates, you want to get rid of it as soon as possible. For example, we use fiat currency to buy things, invest in real estate, cryptocurrency, stocks. And to shrink the currency (Bitcoin) you buy goods or services, or hoard it. This has no effect on the economy, except to reduce the monetary base and make the currency more scarce, so deflation is faster.
In my opinion, Bitcoin is a store of value, not a currency. There may be cryptocurrencies becoming legal tender, but not now, volatility and supply and demand need to be considered.
Bitcoin is store of value becuase of its scracity, means limited supply of 21 Million, that is why it is better to hold it to book huge gains in future. As well as digital cash and you will see some good DEFI Projects being launched on its network in coming future that will further enhance its use case. Lightning Protocol Mitigates Bitcoin Network’s Deficiencies as High-Cost, Slow Settlement System like Visa does. This network will enable Bitcoin holders to use it for buying goods and services.
https://www.crowdfundinsider.com/2021/08/178913-lightning-protocol-mitigates-bitcoin-networks-deficiencies-as-high-cost-slow-settlement-system-like-visa-does-for-fed-reserve-report/