The good news is they can use decentralized exchanges instead to avoid any problem and it's the best alternative
But the problem is that there is a lot of risk involved when one decides to use decentralized exchanges(because it is not regulated, even the support team of that exchange can support you only a little to recover your funds when lost).
Bitcoin is more like an insurance against a global catastrophe, and it allows you to be in command of your own money, without needing to depend on banks. It will eventually offer you a great way to make payments and transfers, so basically is a great innovation in the financial world, but it should not be a tool to avoid paying taxes.
If people just accepted that, I guess there would be less fear from regulators.
They don't fear taxes, what they fear is the regulators itself. Since it can be used to control your own money, it would be bad if governments around the world decided to ban bitcoin(because it disrupts the current fiat currency and banking system).