Crypto currency has always been decentralized, this has given the users a leverage on the government. Placing regulation on it will slow down the activity of crypto currency. this will damage the market of crypto currency, decreasing the prices of every crypto currencies. But then again as the transaction of crypto currencies are nit monitored by government illegal activities can take place.
It seems to me that you have not noticed how the entire cryptocurrency market is regulated. The initiative came from the state but the exchanges agreed to take over the traditional functions of banks. Now they require documents for KYC and can freeze any accounts. This is the real regulation. Maybe for this reason bitcoin is losing its popularity?