These currencies are backed by the taxation power of the respective issuing government. You don't have that with bitcoin.
I've often wondered about that.... how real is this effect? I agree that if the taxing authority doesn't have the ability to create more currency then taxation power is clearly important. But if they can just print more anyway, then all taxation power gives them is the ability to target subsets of the population for confiscation rather than relying on inflation to take equally from everybody.
Looked at another way, why should a government's taxation ability (which is a statement about its ability selectively to extract wealth from its population) allow us to say anything about the value of a particular currency?
The only link that I can see is that the government may demand that the value is transferred through the medium of their chosen currency, which would create demand for it at certain times.Either way, I'm not sure the "taxation" argument is as strong as people seem to think.
The part in bold is exactly the point. Because the US government has a taxation monopoly in economic activity within the US border (plus of worldwide income of its citizens living abroad) AND these taxes have to be paid in US$, the US$ has a certain minimum value. As long as these conditions hold, i.e. there is significant economic activity in the US and the US government maintains its power to tax it, the US$ will never go to zero (no matter what the delusional hyperinflationists may tell you), as when tax season comes, these taxes will have to be paid in US$. Bitcoin doesn't have that luxury. Nobody needs
specifically BTC for a particular purpose so its value could very well drop to zero at some point (if, say, a better alternative is found and gains more traction etc.).
As for what you say in the first paragraph, printing money away can only work if the conditions I already mentioned exist (i.e. significant real economic activity and ability to tax it), otherwise nothing backs this printing and you end up like Zimbabwe, the printed currency is not worth the paper it's printed on.