This is the path of cryptocurrency development. In the future, many coins will disappear in addition to Bitcoin. When the government issues coins, the impact on cryptocurrency is huge. Perhaps this time bitcoin prices will return to $3,000.
And why do you think that bitcoin is going to disappear just because the government creates their own coin? Even if they create their own cryptocurrency that cryptocurrency is not going to have the very same characteristics as bitcoin, which means that it is not going to be a direct competitor and when that cryptocurrency crashes like everything that the government creates we will need an alternative currency and that could be bitcoin.