That's the "use it to buy things" which isn't utility. The laptop I'm typing on will not be worth more later. Ever. This very second is as much as it'll be worth, which is perhaps half of what I bought it for a year and a half ago. But I bought it, because I need a laptop. I fully expect it to be continually worth less, just like the couch I'm sitting on, the watch I'm wearing, the table I keep the laptop on, etc. But I put up with that because I'm using them. Bitcoins are useful for these things, but that's not utility - you don't buy a bitcoin and (supposing they dropped heavily in value year after year) shrugged and said "Oh well, I need this bitcoin for this so I'm keeping it even if I get very little in return for it in five years when I craigslist it as '1 used bitcoin, still in pretty good shape'".

You're saying that drugs cannot easily be bought with government-issued cash? It's totally the other way around: drugs are easily and frequently bought using cash, and vanishingly rarely bought with bitcoins.