Despite the popularity of Bitcoin, there are still many people who do not know about Bitcoin. But when they know about it, they try to get involved quickly. Due to the government restrictions, many people can't do anything whatever they like. There are many bitcoin enthusiasts in my local area who want to transact with bitcoin for buying goods or necessary things but are deterred from using bitcoin because of the legal complications. But personally they are very enthusiastic about holding and many have been accumulating bitcoins for a long time. I strongly believe that in the long run Bitcoin will surely become one of the most popular means of transactions. P2P will gradually take over the space, especially if Bitcoin is not allowed to be used at all.
The interest of people in using Bitcoin as a means of payment for their purchases will barely have any impact on the matter as long as the government of a country isn't ready to allow them to do that. Merchants wouldn't be able to accept Bitcoin or cryptocurrencies for their businesses if there were legal consequences to that. Such things don't exist in some parts of the world, however, in other parts, the governments and authorities are completely against Bitcoin.
The reason for that is simple, they know if they allow people to use Bitcoin for their payments and purchases, they wouldn't be able to track the finances of every individual hence they will have no control over it and they don't want that to happen.