It is only possible to pay taxes with BTC in a few failed states like El Salvador. So that's hardly a positive. And I expect that little experiment will probably be terminated soon after Bukele leaves office.

Zermatt in Switzerland is a failed state how?

Sure, but the argument wasn't that BTC was merely overpriced, but that it was mathematically worth zero.

Hey now, Colorado has started accepting Crypto payments recently. Per the CO Dept of Revenue - "Starting September 1, 2022, the Colorado Department of Revenue (DOR) will now accept Cryptocurrency as an additional form of payment for all state taxpayers. This includes individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax."

The state is not actually accepting cryptocurrency tax payments. Tax liabilities are still denominated in dollars. All that they have done is partner with a third party payment processor which will sell you dollars for cryptocurrency at the current market price (minus fees), and then forward those dollars to the tax authorities.