Tax comes before any plans any government has for their citizens. Regulations might actually be because they want to know who own Bitcoin and not because they want it. If they want Bitcoin like that, it wouldn't cost them much to buy and hold instead of waiting for people to tax. The government has the power to print money the way they like and people might not know, they know how to manipulate the numbers better without even the economists attention.
If the government are going to tax you of your Bitcoin, it's better it's kept in non custodial wallet, that way you don't have to worry the government will put eyes on your investment and be tracking your Bitcoin investment, you never can tell exactly what government can do next, they don't see money and let it go.
Using a non-custodial wallet does not guarantee you'll be safe from paying taxes. Especially if you're careless. By sending your coins from the non-custodial wallet to a centralized exchange, the government will have a trail (or track record) they can follow to collect taxes from you. It's all due to the enforcement of KYC/AML laws. That's why everything needs to be done in a decentralized and off-chain manner (in-person/Face-to-Face trades). Even better when you use a privacy coin.
Many countries in the past used to reject Bitcoin out of skepticism. It was the wild west in the early days. Now almost everyone is on-board as Bitcoin has taken the path towards "institutionalization". Of course, there are a few countries that are still against Bitcoin. But I believe that's bound to change in the future. At the pace we're going, it seems to me that we'll be living in a "hyperbitcoinized" world. This means the widespread use of Bitcoin as a currency on top of Fiat. As long as decentralization is preserved, there should be nothing to worry about.
