This is a means to herd users into breaking the privacy cloak Bitcoin offers. If it is tagged as a suspicious commodity, then bogus regulatory laws placed on it through centralized platforms can be justified and users are forced to de-anonymize themselves.
Monero for example, which is one of the most privacy centered cryptocurrencies has come under lots of attacks and criticisms from government agencies who are constantly trying to track it - Private Coin Monero Can Now Be Tracked By US Homeland Security or to reduce its adoption by exchanges making it more difficult for it to be used.

With the increasing suspicion being linked to cryptocurrency transactions, Banks and governments increase the cost of users trying to maintain their privacy when transacting, which is a big threat to government control.

This is the regular opinion I get from people. The narrative of Bitcoin as a means of facilitating illegal activities has always been a means of controlling it or dissuading people from using it.