The evolution of Bitcoin has a parallel with the South Sea bubble of 1720, which was one of the greatest speculative episodes in modern history. One of the reasons that the South Sea bubble took off is that it was promoted as having value from the trade monopoly with South America that was granted to it by the British Parliament.

While most acquirers of stocks in the South Sea company bought them for speculative purposes, the narrative surrounding its potential was largely built around the value of its monopoly franchise. Once this narrative lost credibility, the price collapsed despite the fact that most investors had not bought it for its monopoly value.

Every bear market ever wants its narrative back.

The allure of Bitcoin lay in three features: It was one of the first large-scale applications of the blockchain technology; it was a potential rival to government-issued fiat money; and it provided the ability to make digital payments that could preserve the (quasi) anonymity of transactions while avoiding the messiness of cash.

Bitcoin can be thought as having real value as it offers a rare service for those in search for electronic means of quasi-anonymous payments. But as long as the anonymity feature of stablecoins and Bitcoin are similar, the attractiveness of Bitcoin will likely decline for those using them to conduct illegal activities, as stablecoins are a better means of payment.

Anonymity is bitcoin's only differentiating feature I guess.