I think that's quite possible. To be honest, killing Bitcoin is really easy for them by doing things like that. Just make it illegal, block or ban any bank account that has any transactions related to crypto, and so on. However, this will push illegal exchange or trading center to show up, I'm not sure they wanted it to happen.
People will find a way to trade Bitcoin or crypto using any other means, like OTC via Bisq or other dexes.
I don't agree with you. They tried things like that over and over and over in the course of years and years and it didn't work. Surprisingly for a lot of individuals.
They don't really have that much power over it like it seems. With fiat their word is law, here not even close.
The funny part is that everyone can participate since using it is something that anyone anywhere with internet connection could do and they will probably have to adapt in the future to this technology and not otherwise.
This world really needs changes, deep changes at different levels. It shouldn't be like this, like Einstein said: "The definition of insanity is doing the same thing over and over and expecting different results."