Bitcoin is not widely used for dally payments yet, so volatile prices makes it difficult to use as a stable currency
This is the main reason why I don't think bitcoin will replace fiat and elimate banks. Even if our fiat currency is decreasing in value over the past years because of inflation, it will still continue to exist together with banks since using bitcoin on a daily basis is still very difficult.
Aside from its volatility, businesses also not want to accept it on their payment system since they avoid conflict with the authorities.
Even if bitcoin becomes stable or becomes faster and has cheaper transaction fees, it is unlikely to replace or completely eliminate banks. As some members mentioned, banks play a much larger and more important role in the economy than bitcoin. It is no coincidence that the banking industry is considered the backbone of any economy and if we want to replace it, we need a similar or better entity. We cannot expect a financial asset/instrument that only has transaction, payment or investment functions, and cannot provide services such as lending, implementing monetary policy to replace a bank.
Bitcoin can replace banks in some aspects such as payments, value storage but cannot completely replace banks because it cannot take on the tasks and roles that banks bring to the economy.