It's not so much about killing bitcoin, than it is controlling it. We are sleepwalking our way into a dystopia where Bitcoin is no longer "A Peer-To-Peer Digital Currency".
For most (almost all?) holders of Bitcoin and other cryptos, the net-effect of their holding isn't peer-to-peer anyhow since they keep their account on some brokerage like CoinBase or Binance. Privacy-wise this is not that different than having money in a bank account and spending it. You can make anonymous payments, but I can't see a lot of people doing that since it's so slow/expensive.
And things like buying a car is pretty much free of any earthly advantage since you need to... register the car in your own name, etc.
And then there are rumors (or are they actually rumors anymore?) that the FBI is able to effectively trace bitcoin transactions.
Net-net, just like cash, if you try to cheat the government out of relative pennies e.g. food servers not reporting all of their cash tips, most likely the government won't go after you (I am in no way endorsing tax evasion here!).
But if you try to cheat the government out of a "lot" of money, you'll probably make it worth their while to catch you, and...
using cryptocurrency probably isn't going to help you escape.
Cryptocurrencies are a speculation instrument and nothing else,
and there's nothing wrong with that. If people could just get used to that idea, they would stop worrying about all of these non-issues that cryptos keep having e.g. their lack of adoption as a mainstream means of payment.
But what if it wasn't like this?
Short answer: it probably wouldn't make much difference to Bitcoin's price since the percentage of people using cryptos to evade detection by their government is probably very low (not saying it's "zero" or anything of the sort, but percentage-wise, I suspect it's very low).