That war has already started. They figured that they can't stop it. So they decided to corrupt it. KYC, war against privacy tools (like coinjoin) etc.

we are in the "then they fight you" stage.

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Yes, but the states still auction BTC off instead of burning it like ivory or cocaine. This phase is the antebellum for the war on Bitcoin.

It would make bitcoin even more scarce and valuable. And they want the liquidity for their stupid projects.

Yeah of course. I wanted to illustrate that they don't see it as something inherently bad... They still auction it off, but they burn cocaine. The war on Bitcoin is not fully on just yet.