1.Governments can indeed stop bitcoin by criminalizing or taxing its use.
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This has been tried multiple times by China. It has failed miserably every time. If even the CCP can’t ban it (and make it stick) in China you know its simply beyond the power of any national government.
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Sure, a small number of bitcoin transactions in China probably escape detection. But large scale commerce needs to be conducted openly. What do you think would happen to a business in China that openly operates by using bitcoin in defiance of Chinese law? And what if the EU banned bitcoin use?
Its been tried. What happens? People keep the bitcoin they have and/or continue to buy it. As long as people will accept it has value....and not just people in China but people outside of China....it will continue to have value regardless of the diktats of the local government. What happens if the EU bans bitcoin use? Europeans keep using it. They park more of their money in offshore accounts with Bitcoin. They can always cash out. They can always exchange that Bitcoin for something else of value anywhere else in the world they go. The EU government can't make it worthless by simply saying it. That's why multiple attempts by the CCP to ban it failed miserably and always will.
Bitcoin is used to escape capital controls. The use case in China is the oligarchs transferring wealth from China to the West via bitcoin. It’s then converted to even more hard assets like real estate in Canada and Montana.