Governments frequently misunderstand bitcoin innovation.
This impression arises from the disproportionate bans and regulations they enact.
Although occasionally the bitcoin regulations appear unreasonable, I posit that bitcoin is not as detrimental as suggested. Please correct me if I am wrong.
The government does understand Bitcoin because if they didn't, they could have banned it. What's happening is that they are regulating Bitcoin and the entire crypto market, so that's a statement that they understand it. If we had to choose, would we prefer to see Bitcoin banned or regulated?
I understand what you mean about the complete anonymity, right? However, forget about that; it's not realistic anymore as we are not in the early stages. Whether we like it or not, the government will function, and no one is above them, which means they will regulate everything.