There is no scenario because Bitcoin is a digital currency system that can be used as a long-term asset and the best hedge against fiat currencies.
The most likely risk with Bitcoin is that you will no longer be able to use Bitcoin if the key is lost from your stash and memory. Other than that risk, I don't have any feelings that make me worry about Bitcoin. For example, if the price drops from the price I bought it yesterday, I'm not worried.
The risks of investing in Bitcoin are much greater than simply losing your wallet's seed phrase.
Isn't this a wrong assumption? How could a devalued holding have much greater risk than total lost of your holdings? At least when the Bitcoin price goes down, we still have our Bitcoin and have the possibility to recover soe of our investment if we decide to sell it unlike when we lost our seed phrases, even if we wanted to sell it at a lower price, we cannot access it.
Currently, the US government has a positive attitude toward cryptocurrencies. None of us can know whether this support for the cryptocurrency sector will continue when the Democrats return to power. Think about what could happen to your Bitcoin investments if Democrats who are negative towards cryptocurrencies come to power. What if they are able to rule the country for several terms and will do everything possible to counteract the development of the cryptocurrency sector? This is just one example of when your investments could be frozen for several years. Therefore, it is important to remember that investing in cryptocurrencies carries very high risks.
We cannot deny the possibility of US government turning its back on Bitcoin but I am sure that Bitcoin can still continue and recover after this setback. We have seen how resilient Bitcoin market is, it had crashed and dumped so many time but still able to recover and break its ATH when its due. I do not think that the US is the only thing that keeps the Bitcoin market going.