Bitcoin, just like traditional money, can exist as a non-blockchain ledger entry in bank's computer system. This is how most exchanges and custodial wallets work.

The difference is, you can also self-custody your Bitcoin. Obviously what's in your custody is just a private key; but for all intents and purposes that is self-custody. You are the sole person in control of those coins.

So Bitcoin gives you the choice of how you want to store it. Traditional money does not give you that choice. At a certain point there are physical and practical limits to how much cash you can self-custody (not to mention transport or transfer from one place or person to another).