The biggest flaw with this angle is the assumption that Bitcoin challenges USD.
How is that possible?

• Bitcoin isn't stable.
• Bitcoin isn't debt.

The ultimate function of a fiat system is that debt is easy to create and that debt has a stablish value. Bitcoin, and in fact all crypto, is not trying to compete with these functions. In fact Bitcoin is the most pristine collateral the world has ever seen, which is something that all debt-based economies have been in desperate need of. So not only does Bitcoin not compete with fiat; it helps fiat quite a bit. This will become more obvious as the bankers start creating Bitcoin derivatives... the first of which has already been created in the form of an ETF contract.

Just because the creators of crypto said it competed with fiat doesn't mean it actually does. In the end it makes sense that permissionless systems that bankers could use for their own ends was actually going to help fiat and debt-based ecosystems; perhaps more than any other technology ever invented.