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First off, this doesn't make any sense. You have to have fiat so you can spend it on food and fiat in the bank to pay for bills and property taxes if you own a house etc. So when people say they are all in on BTC, they obviously still mean enough cash in the bank for your basic bills things? Like they still have at least 2k usd or 5k usd or 10k usd in the bank? Or for people with lot of money, well still at least 500k usd in the bank right etc?
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I am in this category my friend and it makes more sense to me, not otherwise as you make it look. It will not make sense only if the person is a fool and didn't plan the investment correctly in relation to his regular way of life and possessions. For me, there was a time when you would hardly see up to $100 in all my bank accounts. I still practice a similar style till now but I made sure I still reduce it very much as you may not find as much as $100 equivalent in my bank accounts in local currency, but you would still find more in my USD-domiciled bank accounts.
My plan of not keeping the majority of my money in the bank is that banks are only cheating me and not giving me adequate interest for my money, and when I can get it elsewhere, why not? Bitcoin and cryptocurrency have opened the eyes of people to how the centralized systems are cheating us, and at times, if I put my money in crypto, I could still be earning as much as 25% of my earnings on a monthly basis. This is a regular time and not like this time we are experiencing a bull run. So tell me, would it be wise to put the money in the bank that will be using it and still give me a peanut for the whole year? Some banks might give about 8% per annum whereas crypto could give me way more in just a month if carefully planned.
But people should be smart about this, you don't sell all your precious assets to keep in crypto, anything bad could happen. This is why I diversify my portfolios all the time. People can buy lands and properties, invest in crypto, stocks/shares and others, and still have their work and businesses running. I only make sure that I do not have much in my bank account instead of wasting it there for the use of the banks themselves. I see this as a smart plan.