Making laws that prohibit purchasing, selling or holding bitcoin, with penalties. Laws already exist requiring gatekeepers of the financial system (e.g. Banks

Making laws that prohibit purchasing, selling or holding bitcoin, with penalties. Laws already exist requiring gatekeepers of the financial system (e.g. Banks and payment processors) to monitor transactions on illegalities, e.g. money laundering. Bitcoin would just be added to the list. Banks are required to set-up their own systems for this. It'd be trivial for banks to find out which bank accounts are owned by exchanges or bitcoin companies like Coinbase, and close those bank accounts, as well as freeze any transactions to these bank accounts. New companies can't open new accounts. If you try to make transactions you get your money frozen/seized. And even if you hold bitcoin, to use your profits (e.g. to buy a house, a car, pay rent) you'd need to go back to dollars through a bank, or launder tons of cash, or find a counterparty to your transaction willing to illegally accept bitcoin e.g. when selling his house, all things extremely unlikely to happen at any scale by regular joes. At that point the amount of capital flowing to bitcoin will massively decline and bitcoin plummets. Nobody is investing in an asset class speculatively if the only way to buy it is to go to a street corner and meet up with an Internet Guy with a bunch of cash. That's fine for buying drugs, it's not going to drive a trillion dollar market cap (like today) illegal virtual coin that's otherwise useless.