I kind of think that if Bitcoin is successful, they will prefer to use it. As bitcoin becomes more private and accepted, it will be an upgrade over fiat.

Like that meme goes, if the government wants to regulate something they just need to wrap it in terrorism or child porn. I think we need to equate bitcoin to something like the internet, where terrorists use it just the same as everyone else, but the benefits of of having it far outweigh any slight benefits criminals/terrorists get.