Lack of fungibility seems to be a double-edged sword. The transparent ledger means it's not a safe harbor for criminals, which would be a much easier argument to make of something like Monero if it was threatening the dollar. On the other hand, I think it's reasonable that even non-custodial bitcoin, despite its sound money qualities, could be co-opted by a surveillance state. From my research, Whirlpool and lightning aren't really enough to guarantee privacy unless you really know what you're doing and are exceedingly careful.
Lack of fungibility seems to be a double-edged sword. The transparent ledger means it's not a safe harbor for criminals, which would be a much easier argument to make of something like Monero if it was threatening the dollar. On the other hand, I think it's reasonable that even non-custodial bitcoin, despite its sound money qualities, could be co-opted by a surveillance state. From my research, Whirlpool and lightning aren't really enough to guarantee privacy unless you really know what you're doing and are exceedingly careful.