If the currency is collapsing, who’s going to trade Bitcoin for the collapsing currency? That’s the necessary first step in this process.
If I’m just trying to cross the border with Bitcoin in my mind wallet so I can convert it back to cash on the other side, why does it matter if 1 BTC is $10 or $10,000,000? It doesn’t, because moving money round-trip through a currency is a matched pair of buy and sell trades in a short period. Net zero, long term.
This narrative that Bitcoin is somehow going to save refugees from oppressive governments is possible, but deeply flawed in practice. Either way, it’s not a long term driver of demand.
Frankly, it’s far more likely that the dictators of such countries would use Bitcoin to flee the country with their citizen’s money and avoid prosecution than the other way around.
Well, you'd probably find someone wanting to trade Bitcoin for goods, and as part of the transaction, someone else would end up using local currencies to buy those goods.
... Of course, in the general case, you're probably more likely to find someone who wants to trade USD for those goods.
If your net worth is tied up in goods, assets, and other non-cash investments, you don't need Bitcoin to avoid currency inflation.
Then you start buying and transacting with good old Yankee dollars, as the good people in places like Zimbabwe and Argentina and Cuba and other such places have done, because this is the low volatility option and dollars are widely accepted. You don't buy the cryptocurrencies, as they are subject to wild price swings and only marginally accepted.
If you can't buy dollars, something like gold is a much better hedge than bitcoin.
At any given time, some small slice of world currency demand will be focused on this “protection from unstable fiat currency” and some other small slice would be like a prepper mindset hedging their perceived risk of facing that (eg “but what if the US dollar collapses?” from people with very extreme risk aversion preferences).
That total “market cap” demand for cryptocurrency will surely be way, way lower than traditional fiat currencies, but it may still be much higher than the current total market cap for crypto, which means there is room for completely rational speculative buying and holding of crypto, depending on your outlook and risk preferences, for perfectly sound reasons.
I highly doubt Bitcoin is ever going to become a major direct medium of exchange. But also it does not need to become that. It can offer big value in a lesser role that would still justify speculative buying of crypto today.