Definitely Government involvement in crypto could significantly increase its use and much of people trust. Right now many people do not get involved because they worry about scams. When government supports or uses cryptocurrencies it makes them look more official and less risky. This also helps people see that technology itself is not problem it is people who create scams. Government programs could lead to better rules that protect people and build more confidence in market.
Government involvement will also make Bitcoin less-decentralized. The path towards institutionalization of crypto is all part of the plan to keep everything under the control of the government. It's already happening as we speak. With centralized exchanges dominating the market, we should expect the worse in the future. But of course, not everyone cares about this. Most people want to make money, so letting governments regulate the industry would be "music to their ears". As long as they're able to "freely" buy and sell, nothing else matters.
Satoshi must be reeling with anger, seeing how Bitcoin has moved away from its intended purpose. With "Wall Street" in play, BTC has integrated itself into the centralized financial system. We'll see what happens in the long run.