I get the sense it was appropriated from an even earlier time than the onslaught of the alts. I can find forum conversations in 2010 relating to Bitcoin where the parlance appears to be in use, but on first glance it may be more of a shorthand for "cryptography", rather than "cryptocurrency":
https://bitcointalk.org/index.php?topic=115.0"Crypto" has been a shorthand for "cryptography" for a very long time, long before Bitcoin was created. And cryptographers started to get very annoyed when cryptocurrency enthusiasts appropriated their slang word.
This is not Bitcoin- or cryptocurrency-related, just an example that "crypto" meant only cryptography back then.
I do think "crypto" (cryptocurrency) is a fair normie description for what Bitcoin is though, with the cabeat that Bitcoin really is different from the rest.
I think it's crucial that beginners and people from the outside should know right from the start that Bitcoin and altcoins have very different properties. And putting them together under the "crypto" umbrella is counterproductive for this purpose, because it creates a sense of equality between them.