This is how bitcoin dies:
* They support savers by maintaining a real interest rate
* Women in Afghanistan are allowed to open bank accounts, so they no longer need bitcoin
* CBDC becomes a bearer asset that allows confidential transactions
* Responsible fiscal policy via reduction in military spending
* ...
They never ban bitcoin, instead they give you less reasons to use it. It also becomes less volatile and "trendy". Institutions can get bitcoin exposure to paper bitcoin. The paper bitcoin is backed one to one and there is never any rehypothecation on it. This disincentivizes self-custody and self-verification further.
This is my steelman. It is possible, but very unlikely.