Bitcoins have the amazing property of decentralization and anonymity. If government will intervene it will have both positive as well negative impacts on this cryptocurrency. It will be more or less fiat. Then there will not be much difference between both.
Bitcoin has it decentralization that makes it different from others currencies, if government act to regulate it will mean mainstream, we would be regulated our income would has a tax to pay the same way people has to pay with fiat. At my vision if they come to regulate bitcoin would be good, if they just come to tax or take control of the coins for sure no one would allow them to take a look into any portfolio.