To some extent, every currency[0] requires collective faith. Paper money backed by our bizarre Federal Reserve / QE system isn't much less absurd than anything in the crypto world, and that's money that can't be programmed.
Still, you're not wrong about the quasi-cult like behavior in the crypto culture, which is unsurprising given the financial incentives that reward irrational exuberance and unsubstantiated hype. And the experience and performance are as abysmal as you describe; it's reasonable to hope/expect those would be improved upon, but it's somewhat surprising that we're roughly at the ten-year mark and it still hasn't happened [1]. (Aside: proof-of-work is an ecological anti-pattern that needs taxed out of existence; proof-of-stake isn't perfect, but it does the job well enough without needing an insane energy overhead.)
I think there's a strong case for replacing, or at least augmenting, faith in the state (aka, violence-backed currency) with a Schelling-focus faith in Turing-complete algorithms (aka, math-backed currency). I think there's even room for banking institutions as value-adds: if you're a nerd or a tinfoil-hat type, you own your keys, but most people outsource that service (including theft protection) to the bank. But the infrastructure simply isn't there today, and the actual value provided by the crypto ecosystem is minuscule relative to its valuation. It's better treated as slow-motion gambling than anything resembling an investment. When the belief disappears, so does the value, and there are a vast number of small gods vying for our attention, most of whom won't make it.
[0] (other than commodity-backed, like Romans with salt)
[1] I'm sure someone can point out an up-and-coming counter-example; while I'd love to hear about those, the point stands, given that a seamless experience isn't normalized, and hasn't hit an inflection point of utility for consumers.