Crazy questions but answerable, for starters I think it's absolutely foolishness to keep your coins in such a way that the government can actually detect that you have Bitcoin infact if am the one I will definitely have Bitcoin but I think I will stay off grid which is from every CEX that would need my details for verification.
And then for the second question, I think before ever we even start investing in Bitcoin through DCA or whatever means there are some simple rules we ought to keep and follow and one of them is having all the necessary funds available to avoid such a scene @reserve funds, emergency fund and float funds.
I do not think that I would be that brave, if my nation said that they are going to arrest anyone they learn that has bitcoin then I would stop using bitcoin. There wouldn't be any love from me to them, I would hate them for doing it, and I would try to elect someone who would reverse it, I would actually go out and try to get votes and volunteer for their campaign to get them elected if I can, help as much as I can, but at the same time if it's banned and illegal I would still not use it because I do not want to be arrested.
Thankfully my nation just taxes it, and I do pay taxes most of the time, sometimes I do have debt that is big enough that I do not have to pay taxes, because if you have huge debt government doesn't tax your income here, but even if you do not have debt, it's legal and you just pay a tax and you are fine to use it. That way is better, because both the person is earning but also at the same time we are talking about government earning from the tax.