If Bitcoin becomes widespread enough that most people hold their savings in it, then it will greatly and permanently reduce liquidity in the financial system, lead to a decrease consumer spending and cause major ructions in the global economy.
Nice write up OP this should really should bring mixed reactions from the community for a healthy debate/discussion.
And I want to agree with you on the possibility of a liquidity reduction should a widespread Bitcoin adoption happen...but then again one of the qualities of money is scarcity, for as long as the central banks aren't printing money to cause inflation then in some way this actually gives fiat value and not liquidity reduction.
Btw, think of it as Bitcoin being a savings account that the banks will benefit from such that the fiat equivalent of holding BTC can easily be pumped back into the economy to address other business which makes this a win wins scenario, so no need for alarm I guess.
As of consumer spending, it really depends on several factors tbh such as inflation, buying power of fiat or crypto, otherwise Bitcoin doesn't really have this influence over people's spending as its pretty much a parallel economy.