we are measuring it's value in dollars.
and what would you suggest we use to measure its value? it is the 21st century, we measure value of literary everything in fiat, those in US measure it in USD, those in Europe measure it in EUR, those in China measure it in CNY and ....
that doesn't mean it relies on fiat. would you like us to go back a thousand years and measure value of things like bitcoin in goods? like saying 50000 satoshi is equal to 1 chicken?
Agreed but not only fiat it also measurable in other cryptocurrency or even tokens. We can still use bitcoin to trade for other stuff we wanted depending on the demand and how smart we use it. The best example is the first usage of bitcoin, in exchange for a pizza.