Bitcoin isn't "money" and can't really be extended to replace the functions of money.
"According to Marx’s monetary theory, although Bitcoin takes the name of 'currency,' it is neither actually a type of currency, nor can it function as a type of currency...From the perspective of the function of money, the most basic function of money is to realize the transaction of commodities, that is, to serve as the medium of exchange. To be a medium of exchange, money must meet at least five requirements...first one is the monetary standard...Bitcoin does not have such a monetary standard...second requirement is the amount of money in circulation...Bitcoin, by contrast, was limited to 21m coins by its creator from the very beginning, and it has not been fully mined so far. Even if it had been fully mined and put into circulation, such a limited number could not meet the needs of commodity transaction...third requirement is monetary stability...drastic fluctuations of transaction value and the lack of the most basic stabilization mechanism make it impossible for the Bitcoin to become a type of transaction money...fourth requirement is the hoarding of money...Bitcoin itself lacks a mechanism of hoarding, since no bank has offered the deposit method of Bitcoins...fifth requirement is the means of payment...Bitcoins lack the above functions, they are certainly lacking in the ability of payment, and therefore cannot be a type of money."
Bitcoin is not tied to anything, it has no backing either in the form of some commodity it can be redeemed for, like the gold standard, nor does it have any backing through liability, like in the case of fiat money. It is inherently incredibly unstable, making it have little trustworthiness or reliability, and often Bitcoin is only used a middle-man currency, where one trades money for Bitcoin then immediately trades Bitcoin for the product. Holding onto Bitcoin for too long risks someone's financial assets. The untrustworthiness is part of the reason why very little places accept Bitcoin as payment, and so there aren't many places where you can actually even spend Bitcoin.
Bitcoin should not even be viewed as a type of money but instead as a financial asset. These things are traded on the market all the time, but that alone does not prove they are a form of money. Money has to be able to reliably represent abstract labor content, which requires stability and the ability to transact the money for something tangible. Even with fiat money, its initial evaluation still derived itself from its history with the gold standard, its value can still be expressed in terms of gold at rates are mostly stable, with some depreciation over time in the dollar but it still retains most its value over time, and this stability is propped up by a central bank that is more or less trusted. The slight depreciation of the US dollar over time does cause some to defect to gold and store their money that way or in other tangible assets, but this depreciation isn't enough to cause the US dollar to lose its trustworthiness as a currency.
Bitcoin lacks all these features so it is very difficult for it to ever become a currency. Money is not simply one thing traded for another, but it is a universal commodity recognized by all. It is not "money" until it takes on a role in universal commodity exchange. Bitcoin is used in very little transactions and cannot be considered money, and its instability is a big reason for this, and the inability to reliably expand the supply of Bitcoin as a currency as the demand expands causes the price of Bitcoin to rapidly hyperinflate as more people use it. However, on the other hand, there is no liability, no central bank controlling Bitcoin, so Bitcoin can often also rapidly depreciate, causing a huge loss for the users, and no one is responsible for it. Both these things have happened, showing the unreliability of Bitcoin and its inability to actually take on the role of money.
"...cryptocurrencies, such as Bitcoins, are only technological products similar to the game, which are not derived (or created) from economic and social relationship. They are of various types, but have not so far become liabilities to the issuers, and they are lacking in most basic credit body. Therefore, the substantial depreciation (e.g. from nearly $20,000 per Bitcoin to $3,100 per Bitcoin) caused huge losses, and their holder had no room for complaint...Bitcoin is just a kind of virtual financial asset, belonging to the object of financial transactions, with the same category as the trading index initially set up by Lehman Brothers or other objects of virtual financial transactions. More than 3,000 types of money have been identified by encryption, far more than the number of countries and regions all over the world, and their transaction values have fluctuated and rarely been 'stable,' proving that these products labeled with the name of money are actually financial instruments."
Bitcoin is not money and has difficulty ever taking on the role of money. There are uses to Bitcoin, but their use is something that any other financial asset could accomplish as well. They can be used for short-term transactions as a middle-man currency. The cryptographic nature of them also allows for these transactions to bypass laws and regulations. This gives them some use, but not to completely replace money, but simply to be a supplemental tool.
"...these 'cryptocurrencies' use the internet to conduct global transactions and break through the legal restrictions and financial regulations of relevant countries (or regions), becoming a borderless financial product and trading market, and providing a new channel for the global flow of funds. Therefore, they are favored by some international financial market investors and those who try to transfer funds across the border on the one hand, and they are also tightly controlled by financial regulatory authorities of various countries and regions on the other."
The text I'm quoting here comes from a paper published in the journal China Political Economy. Here is the link for the paper if you want to read the full thing:
https://www.emerald.com/insight/content/doi/10.1108/CPE-10-2019-0026/full/html’
Bitcoin itself is full of problems, but some of these problems at least could potentially be remedied. China is working on its own “digital RMB” currency which uses blockchain and will be backed by the Chinese government. This might make a currency like this more stable.
