would the Government of the Nations adopt BTC, a decentralized form of digital currency?
Adoption of Bitcoin is different from using it as a reserve. It's no longer news that some countries have started legalizing Bitcoin, but the amount the government owns is so low due to risk considerations. While they have most of their foreign reserves in the USD.
If they do, dont you think we should raise eyebrows and be suspicious of what they could be up to?
I don't think this is necessary as long as they make the purchase public. And of course, they would have seen the light in Bitcoin before they go on such a journey. However, making Bitcoin a substantial reserve is too risky and I don't think any country would do that. They might own a small amount of it, but not totally depend on it as the nation's reserve.
how would it affect the crypto market and individual traders?
The adoption of Bitcoin by governments means more demand and appreciation of the market price as this will add to the market capitalization. There is no way the price of Bitcoin will not reach the rooftop if this happens. However, that is not possible as Bitcoin is not enough (max. of 21 million circulating supply) to go round and the risk of depending on it is too high for a nation.