Worth mentioning is the fact that currencies often fail because of increasing money supply and in effect loss of value. In the case of bitcoin the monetary policy doesn't allow for reckless printing.
The quantity theory of money you are referring to is not universally accepted. The competing theory is that monies die because of decreased demand, not increased supply.
Example 1: reduced faith in a government to repay its debt decreases the demands for its fiat bills, which decreases their relative value, which prompts them to print more to repay its debt, and so on.
Example 2: Cowrie shell money stopped being accepted by colonial power to settle debts with it, it's value decreased, requiring private companies to import more of it to pay for what they want.
With those feedback loops it's hard to know what came first, but it's not obvious that excess supply prompted reduced demand -- it might as well be the other way around.
Example 1: reduced faith in a government to repay its debt decreases the demands for its fiat bills, which decreases their relative value, which prompts them to print more to repay its debt, and so on.
Example 2: Cowrie shell money stopped being accepted by colonial power to settle debts with it, it's value decreased, requiring private companies to import more of it to pay for what they want.
With those feedback loops it's hard to know what came first, but it's not obvious that excess supply prompted reduced demand -- it might as well be the other way around.