So at what point did bitcoin start losing its identity?
Well, Bitcoin hasn't lost its identity at all and it will never lose it even in future. Bitcoin was always an asset and a digital currency, and it will always remain as an asset and also a digital currency.
It depends on the mindset of the ones who buy it, if they buy it for holding then it's an asset for them, but if they buy it to purchase goods with it then it works as a way of payments for them.