I think bitcoin is currency, by currency i mean its like value, not like cash. It is a commodity. When you exchange some commodity worth x dollar with a bank note of x dollar then you are actually exchanging the commodity's worth. Inflation deflation is still maintained by amount of cash flow by government. Fiat money applies in term of cash and not for coins. Because metal is limited. You cannot make as much coins as you want. Bitcoin is also a value it cannot control inflation or deflation. Whatever inflation deflation we will observe will depend on its demand.