i got the impression that Bitcoin has gotten really under fire over that last nine days since the Paris attacks. i hope this will not damage Bitcoin for a long time.
Bitcoin is more transparent than cash payment. All the government should promote its use to fight terrorism. When a employer pay you the bitcoin, from that point on, all your transaction is traceable. The government will know to whom you pay with the bitcoin. If they are in doubt, they can ask you.
Bitcoin can be traceable if every person has one official wallet and uses it for payments. If government wants to control it, it can regulate in the law that you have to use one wallet only and you should let them know your public key to register it to you personally. After this bitcoin can become traceable but not centrally controlled.