Gov can rollout their own digital currency and outlaw bitcoin or other cryptos with devs that don't play ball - but idk how they're going to confiscate everyone's BTC. But they can certainly try. If there's gov backdoors in devices like Trezor or Ledger, they can certainly make a dent.

And there's precedent for this behavior with FDR banning the hoarding of gold via executive order #6102, which was mostly overturned but can return. Even so, it's still illegal to market/use gold as currency or have any competing currencies with the USD. Which is probably why the IRS labeled BTC as property so they could tax it.