I believe bitcoin is created to be used as a currency, but I don’t think the government is open about that. It’s rare to see shops and stores in my country who accept bitcoin as a payment system. Therefore, it’s not surprising why majority fall on seeing bitcoin as an investment asset, and add to that wherein its value is always on the rise, then hodling bitcoin creates more essence having it as an investment. People resort to fiat when spending, while they continue to save bitcoin.
Why merchants are not comfortable with Bitcoin is because of its volatile nature. Business need stable currency for there operations and Bitcoin right now is not providing this feature. The core concept of Bitcoin is P2P electronic cash transfer which means it's a medium to exchange value but over the years we have seen real benefit is in hodling Bitcoin for long duration. That's also one reason people are not willing to use it for daily living. For Bitcoin lovers, fiat is preferred choice for payments while Bitcoin is an asset of investment.