If governments will tax crypto too much or ban it, they will just lose money. People will still hold crypto but they will keep it hidden.

Governments and banks think if they will tax crypto a lot or ban it and they will "solve a problem" and keep control over everyone. Which is totally naive and prove they have zero knowledge about rules of economy and don't know history. All of this was already tested multiple times through history and failed. Why?

Answer is simple. Taxes can't grow without a limit. In theory they can, but not always bigger taxes mean biggest revenue, after crossing certain point tax revenue instead of growing will start decreasing. It is by economists called Lasser curve. Basically higher taxes are more people decide to not pay them or hide some of their profits, so tax revenue is smaller. Also more people try to find loopholes or just leave country. It bring another economical term "taxation without represenation". Governments don't give a shit if we lose money on all this "risky crypto", but they try to steal our hard earned profits if we get them. 100% of risk is on our side, and we get nothing for it. Not pro crypto laws, privileges or anything else. Where all this money go? To politicians pockets. Most taxes for cars or work go into building roads or hospitals, so citizens have some profits. But taxes from crypto don't give anything to crypto investors. Goverments don't use them to start mining Bitcoin, make crypto ATMs or make BTC legal tender.

If they will ban crypto it will be even worse. Most people will keep their crypto, just hide it. Ofc some people will stop investing, cause they blindly believe what government say is right. But most of crypto investors already hate current system: government, banks, big companies and want to gain financial freedom. By banning crypto governments prove we are right. So it will have opposite effect. To gain financial freedom people will risk and keep their crypto. Just they will pay no taxes. First is that hard to prove you own crypto. Goverments have no resources to control everyone at the same time. They can catch one or few people, but like with all taxes or illegal things they can't control all people. And you can always hide crypto or say you lost keys, no taxes until you sell anyway. Goverments won't send whole squad of "SWAT" and special agents to check if you still have your $100 in crypto. Secondly people that own crypto will feel oppressed, so they will be even less loyal toward country and government.

We already experience it with weed. Or on even bigger scale it was visible during prohibition. Most people either smoke weed or know someone that smoked it. Weed is illegal in most places, but barely people think about it as a crime or report it. That is cause too strict laws are hardly enforced. Society must support law. Most people think that for example murder is huge crime, really bad thing to do, so it is easy to get support toward catching and punishing murderers. But smoking weed is not dangerous crime, rather safe fun, so most people think it should be legal. They won't report it and those who smoke will less likely report other minor crimes too.

Less you trust police and goverment less you help it. During prohibition is was even more popular. Imagine banning alcohol. How many of us would still drink? Almost everyone, also cause it is so normal to drink people wouldn't report it and even most cops would participate. Thats how it was in 1920's and 1930's. Only results of prohibition was no taxes and huge increase of mafia and other crimes. If goverments will chose simmilar way to ban crypto, do you really think most people will care enough that you own some coins? "Oh no this guy hold BTC, what an evil criminal..." No one will care, especially that most people don't talk about their crypto anyway. If they will have opportunity they will just move abroad and then cash their crypto in some better to live country.

By taxing crypto or banning it countries will stay behind. It is basically self destruction, those that stay behind in technology lose. Countries that will be pro crypto will gain much more by just letting people invest freely.