It is only when a product is new or something like Bitcoin which suddenly became a thing, that hype was needed as a marketing gimmick to iterate the public and potential investors about it and its use case.

So while hype brought the attention needed, utility makes users stay and explore other use case of which includes across border payments, hedge against inflation and for even small profits if traded on short term in the market.
Real adoption of Bitcoin comes with the real life problems that Bitcoin can and has helped to solve, not just a hear-say scenario and not even by holding it for long term, that's why it keeps evolving to bring in new users to satisfy the ever rising demands for an alternative and more trustworthy currency.

Comparing Bitcoin to fiat would be one of those typical mistakes according to me. There is no limit to fiat currency and the continuous efforts of central banks devalue it via inflation. On the other hand  the limited and decentralized nature of Bitcoin makes it entirely a different beast altogether, Another thing is that the true potential of Bitcoin comes into play when there are significant amounts of money transactions involved, rather than regular purchases. Traditional banking systems are not just time consuming but also entail all kinds of fees and limitations when it comes to international transactions and remittances. The main issue lies in the fact that your transaction could easily get suspended at any moment in time. In this regard, the Bitcoin network provides an alternative solution. You can transfer large amount of money to anywhere in the world without having to gain third party approval and maintain 100% control of your funds, which is basically self custody.

But now if these transactions are done on-chain on the Bitcoin network, it is still not efficient enough because
the time may be longer depending on the number of transactions made and the transaction will be completely disrupted when the transaction surge gets more congested and makes it stuck.

Using Bitcoin Lightning is also not the best way due to the unclear development of Bitcoin Lightning to date.

It is best if we talk about fast and more efficient transactions to use stablecoins, if you really want a quick option.
But if it's okay with the longer transaction confirmation time than Bitcoin, Bitcoin could be an option for anyone who wants to wait and stick with Bitcoin.

if adoption is indeed to take place, it will have to be more efficient and decentralized, Bitcoin will still have to overcome the scalability that is happening today.

Anyone who believes that stablecoin is more valuable than Bitcoin is ignorant. It's just like comparing oranges and apples. Stablecoins are centralised, therefore controlled by an organisation. Bitcoin's price increases, thereby making it a valuable asset and a hedge against inflation. Stablecoins have some good parts like their stability and wide usage, but that doesn't make them, or any fiat currency, more valuable.

El Salvador is a good example, but it seems they have deviated from the initial plans for Bitcoin. The World Bank and International Monetary Fund kept mounting pressure on Nayib Bukele, making him shift some ground.

Holding is not an use case.

The biggest use case will continue to be what Bitcoin was created for.  It will continue to offer an alternative to the dying Fiat system.  I remember very well all the times I was afraid of my Fiat losing value due to inflation, I can remember the last time my country printed more money out of no where and it made me afraid of how much purchasing power I would lose, I remember when Trump printed money like rain drops during the Pandemic and every body was happy thinking that would do them any good when it was showing a really bad sign for the future.

I can not really remember the last time I was afraid of my Bitcoin losing purchasing power.  Any time it ever lost purchasing power it was after many surprising gains.  And when it did, it lost too little to matter and recovered later on anyway.

SMH, I am frankly shocked by your logic.

Dollar is inflated fiat currency with no hard cap, whereas Bitcoin is decentralized, immutable digital asset and infrastructure.

You can't simply pigeonhole Bitcoin as just money and compare it to traditional banking and fiat currency, my friend!

Can you build any trustless smart contract or self sovereign collateral using dollar? LOL, clearly not!

There is already going on with bitcoin's adoption. The fact that we are seeing some people buy stuffs using bitcoin, and create borderless transactions across different countries, bitcoin as a currency has already been working in progress. And despite of the government strict regulations for bitcoin, bitcoin as a currency has not stopped, it has gone better instead.

However, we can't compare traditional fiat to bitcoin. Dollar will always be the widely used legal tender, bitcoin remains the decentralized digital alternative currency to fiat.