How is "hoarding cash" .... also known as saving .... equivalent to losing value?
The argument was that when there is price inflation, hoarding cash is discouraged because it is losing value. You seem to understand the concept, but misunderstood the statement.
In the financial systems we actually use, it's the opposite - inflation is the reason that savings lose value. This is not a good thing!
This is a bold statement which simply fails economic analysis. When money becomes less available for settling debts, then people who have debts become less able to service them, resulting in more defaults or the requirement for larger amounts of debt which generates more virtual currency. While we teach that saving is good in personal accounting, there is a reason that economists tell politicians that saving isn't particularly good for the economy as a whole. Appropriate amounts of positive inflation encourages people to either make their currency available through purchases or by lending it at lower interest rates. Deflation encourages hoarding of money and increases the cost of borrowing, which stifles economic growth.
Your cited Minneapolis Fed analysis is laughable. Linear regressions on charts of inflation vs economic growth? Without controls for government interventions during the event? Seriously? This sort of analysis shouldn't even be taken seriously at an undergraduate level, but unfortunately documents like this get produced all the time and get dragged to defend all sorts of preconceived notions.
By the way, Bitcoin is not intended to be deflationary.
How is it not designed to be deflationary? Introduction of new currency is designed to get slower and the presumption is that adoption will increase. When demand for currency outstrips supply, you get price deflation and everything about Bitcoin is intended for this result. Even if we presume that there is zero 'loss' of these, if things go as planned, we see deflation. Deflation leads to hoarding, hoarding leads to deflation and it all results in a bubble. Talk to currency traders and see what they think of a currency which increases eight-fold in less than two years. They will tell you that any position in it is simple gambling; can you force yourself to get off before the music stops?