At the early stages Russia ruled it as illegal, China outlawed all withdrawals and some other country also spoke against it. But now everything seem to be smoothing up at least on the government side. Surely Bitcoin must be seen as challenging their authority. Is there something I am failing to see? All it would take is a 51% attack or a new law.
Because they can't. Bitcoin was created in such a way that it cannot be stopped by anyone, even if we are talking about the most powerful organizations in the world aka governments. I think governments have realized there is no point in wasting their time with crypto right now since it's useless to stop bitcoin in one country while it is used in the other. This means they are probably thinking to ally together and work against bitcoin because that's the only way they have a chance to do something.