What will happen if bitcoin transactions became anonymous like Monero tomorrow? Will it increase the demand of bitcoin even more in the world ? Or will it have negative effect like government making restrictions on bitcoin ?
I believe you have already get the answer to your question if you look into the level of privacy coin usage and the stance government towards it.
What I come to understand is that mostly crypto enthusiasts never the benefits of privacy coin and the vulnerability involve ignoring their privacy.
About the government stance, they never like something they cant impact, influence, or control.