The utility of Bitcoin doesn't change even if its value drops close to zero, unless you can't buy anymore Bitcoin to facilitate your trade, in which case the price of Bitcoin will go up because of more demand. It can't fail while there is demand for virtual trade on the Internet.
If the value drops so much that there aren't enough coins in circulation to support then spending level, you can't spend it. If sellers aren't also buyers in the virtual market, they won't generate demand for BTC.
