Yeah this confused me for a long time as well. I then realized that there is tremendous value in something that acts as a reliable store of value.

For example, rich people are known to buy expensive art and then lock it away in a warehouse. Why do this? You're not getting any value out of the piece. The reason is that the sole purpose of the art piece is to be a reliable store of value. You're paying a lot for something that you know will hold its value.

This is what Bitcoin has become. It's valuable because it's valuable. And the fact that it has become more valuable over time (despite volatility) makes it even more valuable.