defeated? This is very possible, but I don't think they will eliminate bitcoin. This approach will only make Bitcoin more famous in the world and contribute to the long-term cryptocurrency market. Bitcoin is not afraid of regulation.
Yes i dont think there is any currency that could defeat bitcoin, but who knows in future when so many big country that are started to trust crypto payments. Bitcoin might be defeated by stable coins with so much supply that could be lauched by goverments.