Where some see an issue, another ones see an opportunity. Coercive, restrictive countries dispel investors and crypto enthusiasts in general (customers, developers, entrepreneurs...), while smaller countries looking for foreign income adopt a friendly stance towards bitcoin and crypto, consequently bringing new people and more money to their territories. So far it's not scaring news, because we are talking only about one country (USA). Bitcoin can't be defeated by a single nation and can't be defeat while there are still people and countries supporting its usage.
Maybe CBDCs are going to be a big issue for some of us, as some governments are going to impose its adoption by difficulting the access to decentralized crypto and making it more expensive to deal with through taxes. However, there is still time until it happens, so there is still time to elaborate a solution for the problem. If my country did something like US is attempting to do and I had enough financial conditions, I would move myself to a bitcoin friendly country without any doubts.
As long as Bitcoin remains decentralized, governments won't be able to stop it. I wouldn't say Bitcoin is losing its purpose, simply because people are free to do what they want with it. Those who care about decentralization would use alternatives that are KYC-free and non-custodial (without middlemen). It's normal to see centralization taking over the industry especially when popularity is increasing at a fast pace. Governments will successfully regulate anything that's centralized, but again, they won't have any success doing so on something as decentralized as Bitcoin. Who knows how Bitcoin will be put to the test with CBDCs in play? Just my thoughts
