Earlier quoted context omitted.
This is the correct take, and why American regulators need to address crypto sooner rather than later.
But the WHOLE point of crypto was to avoid governmental control. If the government is regulating it that means they can control it. And it becomes completely worthless. If you want digital gold as an inflation hedge you can literally buy a GLD ETF. It gives you digital shares in actual GOLD.
There's nothing to stop people using crypto to buy/sell goods directly, or to trade directly between themselves, completely outside of government control. And crypto itself can't be inflated away, or obsoleted, or otherwise really controlled by government, except by attacking it; making it illegal to own or trade, to operate nodes, to write code, or use CIA shenanigans, etc.
But if an exchange claims that they hold your crypto 'frozen' and completely separate from their trading activities, and especially if the exchange also deal in government currency, then I think it's quite right for government to regulate, and ensure the exchanges are compliant.