And more to the point what coin were terrorist using before the advent of btc? Bars of gold?
Probably German-Marks. The German Mark was used far outside Europe, and many of these users have followed the switch to Euro's. (Or dollars, since most people will make exceptions for money)The switch to Euro's would have been the perfect event to get rid of all existing black money, I don't remember that having happened. I even read somewhere that converting all black-money to euros (unreported savings, plain money-laundering but also large criminal assets) was crucial for making the switch a success.
If Obama had a switch to instantly prevent the use of dollars in illegal activities and unreported savings anywhere in the world, would he touch it? I think the result would not be pretty.
It's well worth trying to minimize questionable use of a currency, but in the end, currencies need to be exchanged more-or-less without restrictions, or it isn't a real currency any more.