Why is a bitcoin valued at the cost of production, while the dollar is valued at the exchange cost?
Production cost doesn't mean anything, but replacement cost does.
You can't take a piece of paper and turn it into a dollar, but you can take electricity (and computers) and turn it into BTC. But even then, you can't do it
right now (assuming you want BTC now) and you can't do it in unlimited quantity, so it's only an imperfect replacement.