That could happen if the government tightens the rules and forces crypto users to comply. This may limit the growth of crypto and crypto users can't hide from the government because they are being watched. There is no longer the anonymity that crypto users have had.
I do not agree that increased regulation will limit the growth of cryptocurrencies. On the contrary, it will increase it. Bitcoin is an example of this. Increased regulation will attract more institutional money and increase adoption. People need a guarantee that they won't be cheated, that cryptocurrencies can be used legally, and that the crypto environment is free of all kinds of scammers who will steal your money. Crypto regulation has grown a lot in the last 5 years, but the industry itself has grown a lot, many cryptocurrencies have become very expensive. For the idea of cryptocurrencies itself, regulation will be a bad sign, but for the development and adoption, on the contrary, a positive sign.
