I don’t see a reason to believe this would happen. We had 40 years of experience with the classical gold standard during a time when there were multiple industrialised and trading economies using it on a global scale. During this time, the quantity of gold above the ground grew only around 1–2% a year, and so was effectively constant. Production of goods and services grew much faster than this, and the consequence was what would be expected: a generally declining price level and growing prosperity.
Although most gold was in the hands of a limited number of central banks, gold never became illiquid—individuals or other parties could buy as much gold as they wished at a generally stable price, simply because there was a global market in it and (absent restrictions from countries that prohibited gold ownership or cross-border transfers of gold [to their detriment]), there was always a seller to hit the bid of a buyer.
I would expect the situation to be much the same were Bitcoin to become a reserve asset in the same way gold was. Transactions would occur in instruments ultimately traceable to Bitcoin, but actual Bitcoin would not be transferred any more than physical gold bars were shipped around during the 1890s and early 1900s. Some people would want to own Bitcoin outright, just as some in the Gilded Age wanted to own gold, but this would be as a disaster hedge, for which they were willing to pay the price of its generating no income and the risk of it being stolen somehow.
But, unlike Michael Saylor, I do not believe that Bitcoin is the ultimate and eternal answer to the problem of trustworthy, distributed money. What I do believe is that in an environment in which candidate monies can compete for that role, the free market will converge upon the best solution which will eventually gain a large market share.
The point is, cryptocurrencies do not have to work all that well to compete with government currencies, which have a record of incompetent management, consistent depreciation, and callous manipulation for political ends. The question isn’t “Is it perfect?” but “Compared to what?”. From that standpoint, the appreciation of Bitcoin and its slow adoption by the mainstream is understandable.