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 ?
Bitcoin blockchain was not designed for this purpose and you can not erase all transaction history by any technical and protocol upgrades. If privacy and anonymity was lost in the past from your practice with wallets, UTXOs, on-chain transactions, you were done with your broken privacy and anonymity.
The same with Bitcoin blockchain while there is one more important thing. Do you think that Bitcoin users want this blockchain to become one similarly to Monero blockchain?
I guess they don't want that big change as it will put Bitcoin blockchain under more severe regulations and restrictions from governments globally.