Diversification doesn't need to go back into fiat.
If you think fiat is not a good hedge there are plenty of other hedges out there.
Like greenhouses, homesteading, and otherwise sustainable or off-grid living.
Of course you're probably the one to lecture me on such things.
Not the other way around.
If and when I'm a crypto millionaire you can be damn sure I'll pick up a hunk of actual physical gold as well. Crypto is all about hedging in every direction. It is the profitable hedge that allows us to diversify back out into many potentially unprofitable directions. If I leverage my crypto to hedge in a dozen different directions and all but one of those hedges is a fail then I'll still have won, as that one successful hedge is potentially life-saving for not only me but the others around me.
It's also not hard to dump fiat for whatever at the first sign that it's looks like a terrible play.
The likelihood of USD crashing to zero overnight is quite low.
Even hyperinflating currencies in developing nations are a slow-burn compared to that.