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It does though, because various propoganda campaigns have been run to associate Bitcoin with crime. Look at any news publication about Bitcoin involving crime, then you'll see that most are completely biased towards the fact that fiat can also be used the same way. The only difference is, cash cannot be traced through a public ledger, where Bitcoin can be which is also something they usually fail to mention.
Mainstream media has been like that for years but I believe people have grown tired of the same narrative as can be seen from the increased interest about bitcoin.
Ask a member of the general public, and there's a higher chance that someone associates Bitcoin with criminals, than they do with cash. I've witnessed it several times when I've heard people talk about Bitcoin, but I imagine this is fairly widespread.
I've asked some friends before and majority of them have a negative view of bitcoin. That has changed last year when covid happened and everyone was scrambling to look for online gigs and investments. I don't think they see it as a currency yet but it's good that their perception has changed.
It should be interesting to know if you asked the same people again.