Regulation is good for the long-term.  It brings comfort to those thinking its risky and its free publicity  It MAY deter the criminal and tax sheltering individuals from using Bitcoin but it cannot be stopped.  Most countries have some policy in place that classify cryptocurrencies to ensure its something they can tax.

Example:

https://www.canada.ca/en/revenue-agency/news/newsroom/fact-sheets/fact-sheets-2013/what-you-should-know-about-digital-currency.html
https://www.irs.gov/newsroom/irs-virtual-currency-guidance