Materialist answer (inspired by a video called Why The Political Compass is Wrong: Establishing An Accurate Model of Political Ideology, by breadtuber Halim Alrah... and also Jane Elliott's famous experiment)

Business owner makes money by paying workers to produce widgets at $6 / unit. Owner sells these widgets at $10 / unit, making a $4 profit each sale.

Before long, the workers catch on to the reality of the situation: the owner could be making a lot less and still be able to provide "leadership" (or whatever it is he provides). They decide not to work for less than... $8 per unit. With this price, the owner will still be wealthy (the business makes hundreds of widgets, after all). But now, so will the workers.

So the workers save up money and use it to go on strike.

However: business owner comes up with a better solution to the problem: he divides the workers into brown-eyed workers and blue-eyed workers. He then uses his money to discriminate against the brown-eyed workers. His cronies in government make it legal to deny brown-eyed workers jobs and housing. His cronies in the media write hysterical anecdotal stories about various brown-eyed rapists, thieves, and murderers.

Terrified mobs -- stoked into a frenzy by the business owner's well-funded propaganda -- tear down brown-eyed people's homes and food supplies, leaving them destitute before the strike is done.

The brown-eyed workers now must choose between returning to work for the business owner at $5 / unit... or starving to death.

The blue-eyed workers, meanwhile, have just been tricked into betraying their own team. Some were not tricked, but simply unprepared. These unprepared workers stood by in either shock, uncertainty, or laziness, unable to comprehend how their fellow blue-eyed workers could have become so foolishly self-defeating and cruel.

But now the business owner can put up the illusion of no longer needing the blue-eyed workers. He can run his factory on a skeleton crew of desperate, brown-eyed workers, and say to the blue, "uh oh! Looks like the brown-eyed workers just stole your jobs!"

Much like the brown-eyed workers, the blue-eyed workers have a restricted set of choices: A) admit they were suckers --fooled into attacking their own team -- and try to apologize and rebuild their union, B) double down and blame brown-eyed people for undercutting them... but reluctantly return to work, because the strike is broken, or C) just like the brown-eyed workers, they can choose to starve to death.

(A) will be the most difficult. As Mark Twain said: "it's easier to fool people than convince them they have been fooled."

The business owner wins, and now society has an eye-color-discrimination problem. Eye color was an arbitrary characteristic. Yet now it decides where someone lives, who they spend time with, and what kinds of opportunities they have access to.

The business owner can rinse and repeat for: skin tone, religion, country of origin, sexual orientation, gender identity, etc. As the saying goes,

"Divide and conquer."

You asked why trans people are currently the subject of fear and hysteria? No reason. Not any new reason at least. Trans people are different. Any and every difference between workers is an opportunity for those fatcats rich enough to own "The Daily Mail" and the "The New York Post" to separate us into camps and drain us dry, one camp at a time.