> Overnight 50% hyperinflation of the dollar would mean 2 USD worth of BTC/EUR/GBP/milk/anything bought yesterday could be sold for 3 USD today.

Ahh, but BTC doesn't belong in that list at all. The Euro and Sterling are backed by large, stable economies, used by each to value their exports. Milk is a commodity, which has intrinsic value (not to mention cost to produce, market, transport, regulate, and sell). BTC is an asset, but not anything like REIT or bonds, because it doesn't represent anything of actual worth. Or, skipping some steps, its only worth is that you can convince someone it will eventually have any value at all.

Cryptocurrencies are unique among all other assets in that, at the bottom of them, they are figuratively bankrupt and actually meaningless. There are no goods valued solely in BTC (even black market stuff is like "$100 / .0092 BTC") and no strong, stable economy backing it. At the end of the day, BTC basically says "someone will give you a lot of currency you actually care about for these zeroes and ones", and because those zeroes and ones have no additional value (i.e. it's not a cure for cancer or a TLS skeleton key), the proposition is literally worthless.

So yes. Normally that is what inflation means, but only for currencies that can actually purchase goods and services people want, or goods people actually want to consume, or services people actually want to use. Cryptocurrencies are none of those things.

Your position is that 50% USD inflation overnight would cause 2 USD worth of EUR/GBP/milk/gold/anything bought yesterday to be worth 3 USD today but for some reason 2 USD worth of BTC bought yesterday would continue to be worth only 2 USD?

This is wrong, assuming values of BTC hadn’t also changed overnight. It could only be true if BTC simultaneously dropped in value 33%, but that would be unrelated to USD inflation.

That is not my position. I do believe that BTC would also go for $3. But the only reason is that holders of BTC have so far managed to convince holders of other currencies that BTC has some intrinsic worth when, in fact, it has none (other than money laundering, frankly, which is no small thing, but not something people should be investing in). That's why I believe it doesn't belong in the same category as commodities or currencies. It's a huge bubble, and it will be very, very bad when it bursts.

But there's no such thing as "intrinsic worth"... It's all about supply and demand!

Nah I don't buy that (oooh econ pun!). There are basic human needs: food, water, shelter, medicine, socialization. Goods and services that fulfill those needs have intrinsic worth (to humans). When those goods and services are valued primarily in a given currency (i.e. GBP, USD, EUR), that currency gains worth rooted in the intrinsic worth of those goods and services.

And even abstract financial instruments like mortgages, REITs, bonds, CDSs, CDs, shares of commodities, etc. are based on these fundamental things. Bonds are based on currencies--which are only worth anything if they're the primary denomination of goods/services with intrinsic worth. REITs, mortgages, etc. represent shelter. Commodities represent food, water, and medicine.

BTC represents... nothing? Energy loss? Honestly there's no analog. Snake oil is still oil, selling someone air--they still get air. And sure, you can still argue "well camgunz, even if it's literally nothing, if people want it, they'll put a price on it". But... isn't that really just super bad, like collapse of the civilization bad if it ever gets to scale? We really shouldn't be convincing people to turn their money into absolutely nothing. That seems very obviously not a good idea.

The worth of "food, water, shelter, medicine, socialization", financial instruments (including cryptocurrencies) depends on context. For instance water might be extremely precious in some situations (if you're dying of thirst), and have zero, or even negative value in others (like during a flood, because you want to get rid of excess water, even if if by some miracle it happened to stay pure). Hence, no "intrinsic" worth.

There's a difference between "can sometimes have negative value" and "can never, ever have any intrinsic worth". You're confusing the two here.

Or, to put it a different way, BTC isn't any less bankrupt because we sometimes grow too much corn. It's a complete non sequitur.