Basically BlackFor3st point make sense.
No matter what, government action will always have impact to bitcoin/cryptocurrencies prices directly or indirectly. If they ban a coin and make it illegal, that means people who still use it will be under pressure of jail or any other sanctions whether people still want to use it or not. Eventually people will not be able to use/exchange/transact that coin publicly or freely. So the transaction volume will be less that what it should be.

Or another example just look at the past , what was the reason of bitcoin/cryptomarket pump and dump?