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 in consumer spending and cause major ructions in the global economy.
Bitcoin going mainstream doesn’t mean fiat currencies would be going out of existence. That assumption most individuals seem to have is actually out of place. You wouldn’t imagine any nation loosing that part to its authority and identity to Bitcoin ever.
Again, people do invest in real estates, have it seat there in years for it to appreciate in value and the economy still runs fine. Why should Bitcoin be any different?
Is it because @OP tends to view it for just a currency? What happens to Bitcoin serving as an asset…?
Bitcoin isn’t going to shrink the economy and people will always find means to use Bitcoin and be more beneficial at it.