Bitcoin has no power in the real world. For digital transactions is has some leverage as pure data is much harder to control. Unless people are spending their Bitcoin gainz on Second Life property and not real world assets then regulation targeting the "middle men" is simply common sense.

Crypto is trivial for a functioning government to regulate, until we all live in the Matrix.

Of course they will attack the problem at the weakest point. No one cares about the Bitcoin network itself. I care about my authorities being able to trace large financial transactions at the minimum impact to privacy. If given the terrible choice between no privacy and no transparency for any transactions - I’d vote for no privacy.