The 'crush' scenario presented here -- governments using their fiat currency power to alternately buy and dump Bitcoins, creating a boom-bust cycle that scares other people away -- doesn't seem very smart or likely to succeed.<p>Speculators would recognize it and attempt to profit by front-running the government operations (increasing the cost to the government, and dampening the volatility).<p>Bitcoin service providers could offer volatility-protection (instant conversion to other currencies), as some do already.<p>Governments could lose money on each manipulated boom-bust cycle, and at the bottom of each cycle, Bitcoin would still be alive and ready for new uses.<p>Far more likely, in my mind, is an attempt to coopt Bitcoin. Officially approve it, with reporting/identity conditions that don't encumber legal use but ensure tax collection. Or, launch a Bitcoin-like competitor backed by government redemption guarantees (T-Bills, TIPS, etc). So, above-ground businesses can get most of the crypto-currency benefits without the rough edges created by its most anti-State qualities.