'I believe outside of the supply cap the ability to transact without a third party is the most important thing bitcoin offers. Without it the supply cap is pretty meaningless. But how do we get there? How do we get to a society where bitcoin is a widely accepted form of payment and exchange?'

SoV and MoE are both crucial factors in assessing the value of a money. To only have one, but not the other is to have a substandard money. Bitcoin is a threat to fiat money only if it achieves MoE acceptance/use. If Bitcoin remains largely seen as and used as a speculative commodity it is not a substantial threat to the fiat debt slavery monetary system.

Consider carefully how Bitcoins primary stated purpose as a P2P payments protocol has been slyly and relentlessly obstructed by governments and bankers. By designating Bitcoin a commodity and thus subject to CGT, governments have slyly but severely obstructed Bitcoins use as a MoE because to use it as a MoE would require an absurd amount of record keeping. Businesses have been obstructed from accepting Bitcoin by banks threatening to close their fiat banking access. In my country and I believe in most 'liberal western democracies' who are subservient to the USD SWIFT hegemony, if you seek to open a business bank account you will be asked if you intend to use cryptocurrency in your business- if you say yes you will be refused banking.

In other jurisdictions where there may be less pretense of a 'free market' Bitcoin use for MoE is simply outlawed- Thailand and China for example. So in nearly all jurisdictions use of Bitcoin as a MoE is severely obstructed if not outright banned. The example El Salvador gives- where instead there is support from the government shows Bitcoin can be allowed for MoE without any major problems in fact substantial advantages. Bitcoin can provide healthy competition to the fiat monetary system. But the operators of fiat monetary hegemony do not want such competition- precisely because Bitcoin CAN provide substantial competition to their very profitable Fiat Debt Slavery monetary system.

Because the banks and governments have succeeded in severely limiting Bitcoin use as a MoE they have positioned themselves very well. As long as Bitcoin remains mostly only used as a SoV/speculative commodity it is not a serious threat- in fact it has been captured as a speculative plaything. The ETFs advance this fiat capture and control strategy further- they enable more and more Bitcoin to be held by ETFs in a form where it quite explicitly cannot be used for P2p payments. The more Bitcoin held under institutional custody the less liquidity is available for P2P payments, and the more the perception of Bitcoin as a speculative commodity plaything is entrenched.

This positions the bankers/governments well if they decide at any point in the future that a ban on private custody is required. At that point the more institutional custody the better. A ban on private custody however may not ever be required because they have so far succeeded so slyly in obstructing Bitcoins us as a P2p payments protocol and shifting the perception and use of it into SoV speculative commodity.

Note- as a speculative commodity without any substantial realised MoE utility Bitcoin is in some ways no more than a PONZI scheme. If Bitcoin remains seen as and used as a speculative commodity 'SoV' then if at any point its value vs fiat peaks and further speculative gains are seen as unlikely then its value adding formula ceases to make sense...and there is then 'a run on the bank'.

A great deal of the value being added currently is from institutional custody capture via ETFs and even corporate US domiciled treasury allocations can be seen in this category as they would be almost certain to comply with any compulsory Executive Order ban on private custody.

It is the MoE of any monetary system that gives it power and value as the ability to enable exchanges of value between participants in an economy is the most powerful value adding function in any economy. The fiat debt slavery bankers cartel know this full well. Look at SWIFT to see the strategic potency of controlling MoE. Without MoE use, Bitcoin is on a pathway to capture and control by the fiat debt slavery cartel, and ultimately will have failed as it will have failed to provide a viable alternative to their hegemony.