There is so much more then this. I can think of a ton of digital currency that does not need to be physical... that is utter crap. There are a ton of pump/dump alt coins out there. I would not touch them.
Bitcoin is currently and has been like the gold of crypto currency. It holds the most value, has the most companies going after it. There is value behind it. I think the value is what set's it apart.
If Bitcoin is only good because it "holds the most value", then that doesn't make it seem good. You can theoretically pump some shitty P&D coin to the value of Bitcoin right now, does that make it any better? Of course not, but people just see the price tags of something and automatically thinks it's better because it's a higher price.
Same thing happens in capitalism in general. For instance some teenage girl goes to the mall and sees a fancy "name brand" purse that cost $1K, then her mom redirects her to another off brand version that only cost $20... The girl is always going to go toward the $1K purse because it's So-and-so's name brand... Does that make that purse better? Hell no, it's just a way of making the same product look better.
I see the same thing happening with bitcoin right now.