So I think this is not really accurate.

First of the Nr. 1 use case for bitcoin is certainly none of the illegal things you outlined but simply speculation.

Every day 5-20B is transacted this way. Do you think that many drugs are being bought with bitcoin? Then there are many that are storing and transacting wealth this way. This is certainly also not illegal, even though it may undermine the current financial system.

People always say that bitcoin is used for nefarious things, but there is never any data or proof suggesting this actually. It seems to me there is much greater utility in other things where it is used. But these things take time to develop, because of the lacking infrastructure. The thing is if I had a choice to use crypto over any other currency I would not even think about it. But it is simply not possible today. I think however over time this will slowly change.

The main reason why bitcoin is not a real currency however is because of its fluctuation, so in a way you may be right and bitcoin cannot be currency.