This is a misconception I hear more from financial institutions and large corporations than from retail investors or users.
Understandable given that these organizations must manage significant risk, with regulatory risk being arguably the most significant in all aspects of their operations. The truth is that governments can theoretically turn the switch and prohibit the use, trading, and storage of Bitcoin.
Such a threat has been made, albeit loosely enforced, in China, and it is possible that other governments will follow suit. Even the United States may be able to prohibit it in the name of national security, but I would argue that this would be highly unconstitutional.
Any government attempt to shut down Bitcoin, on the other hand, plays right into the hands of the narrative that makes Bitcoin so appealing. Bitcoin is intended to be a money system independent of the government and banks.
This does not make it illegal in any way, but rather makes it independent of the government. Such an attempt could not even bring Bitcoin to a halt. According to the game theory that underpins the Bitcoin network, no party should ever act unilaterally in what they perceive to be their own self-interest and ban Bitcoin.
Regulatory arbitrage would take hold abroad, making it easier for foreigners to profit from Bitcoin while disenfranchising the native population.
The only solution is to reach a point of equilibrium in which all global parties must continue to enable Bitcoin's existence and help it thrive or risk falling behind.
This does not even begin to address the fact that due to the distributed and decentralized nature of the Bitcoin network, it is virtually impossible to shut it down. No government or organization could ever do so at the same time.
Let's hope that governments and other entities do not attempt against this form of economy, and that it can last for a long time without complications. Greetings.