Gresham's law means that, for example, if you have a silver one dollar coin and a paper one dollar (or any metal less valuable than silver) in circulation people will naturally get rid of paper and hoard silver. Are similar in denomination but substantially are different in value.

Doesn't apply to BTC vs fiat.

If we want BTC to grow and succeed we should use it as much as possible and onboard as many as possible. Every additional user makes the network unproportionally stronger.