Only exchanges and centralized services will be regulated and this is not new.
That's one big "only", because overwhelming majority of bitcoiners use those services. Without centralized exchanges Bitcoin wouldn't reach even close to the current price, and adoption would not be as high without convenient and safer buying and selling.
Government doesn't really care if some crypto geeks are sending each other $500 in BTC without KYC, as long as they control the large flows of money, they will consider it regulated enough.