The main source for value is that every USD is guaranteed to be able to settle 1USD worth of debt, and a lot of debt is denominated in USD. This pretty much guarantees a stream of people needing USD over any future time horizon (further factors like certain types of debt discharge reducing M1 and Fed intervention in the lending market) including internationally, with or without US federal taxes on top of that. Its status as an asset ultimately depends on it being someone else's repayment obligation.
BTC doesn't have that (there's some BTC-denominated debt, but it's relatively thin and/or unenforceable) and so future demand is based on fickle wants rather than established needs. I'd be more inclined to trust the long term value of cryptocurrency if it was issued as repayable debt, but I'm not sure how you begin to achieve that in a decentralised, anonymous and enforceable way.
Add to that the need to expand the supply of equivalent-value-BTC IOUs if private BTC-denominated debts collapse in value for whatever reason (eg '08 financial crash). When AAA-rated securities evaporate, the repo operations that rely upon those securities to provide almost all the liquidity in the financial market are kaput. Hard to replicate that with BTC. A BTC-based world needs to address ALL the reasons the USD is used not just appeal to those who see hyperinflation lurking around every corner
BTC doesn't have that (there's some BTC-denominated debt, but it's relatively thin and/or unenforceable) and so future demand is based on fickle wants rather than established needs. I'd be more inclined to trust the long term value of cryptocurrency if it was issued as repayable debt, but I'm not sure how you begin to achieve that in a decentralised, anonymous and enforceable way.