[CTDOCodebases]

"The currency is only as good as the government that mediates its exchange."

That's an interesting way to conceptualise it but I see it from a different broader perspective: A government is only as strong as its ability to issue/acquire meaningful amounts of a valued currency.

Anything that negatively affects these activities will be killed or subjugated to contribute towards them. Bitcoin in its intended form is detrimental to both of these activities so it will be sabotaged by governments one way or another until it is not.

Bitcoin has unique properties that drive it's adoption but all these properties can be diminished or undermined by laws.

"Which means the original intent of crypto only works in this honeymoon period"

If Bitcoin had managed to gain widespread adoption and a large enough percentage of its users held their private keys then it would have been too difficult and unfavourable for governments to start attacking it.

The unsolved technical issues hindered adoption so Bitcoin has been relegated to a volatile store of value giving government the time to realise the threat and act accordingly. Regardless of how unreasonable, harsh or onerous a set of laws are they can be effectively implemented if the portion and power of people they affect is small enough.