So many governments around the world have considered bitcoin as a currency that'll disrupt economic and financial activities of the government, and that's why there's why there's the clash.
To me I think bitcoin and cryptocurrencies will continue to be viewed with distrust by governmental authorities until the governments can more effectively monitor and control them.
This thing you just said is the current problem Bitcoin and other cryptocurrency are facing in my country (Nigeria). Our government believes that crypto is one of the major reasons why the country economy is crashing and also the local currency (Naira), which is a lie because I see no way where bitcoin will affect the economy of a country. They even went so far as to ban Binance from p2p with Nigerians, so the main reason why the government is still against crypto is still the fact that once they accept it, their local currency will be affected because of the freedom bitcoin as a currency is going to give.
and they will not get control over the citizens funds again; furthermore, the only thing that will make the government accept crypto is if they can have control over their transactions, and this is not the reason why Bitcoin was created; in fact, cryptocurrency in general, so since it was created to be an alternative currency, I think it will be even better if the government does not have a hand in bitcoin to avoid tarnishing the image and normal function of how it is supposed to.