No, the argument is that p2p Bitcoin liquidity will dry up if nonKYC usage is attacked by regulation similar to how OFAC sanctions apply to coinjoins now. I propose that if the current regulatory development continues, all non-KYC usage will be under attack. This is why Monero is delisted from most exchanges while ZCash and Litecoin are on most exchanges. The transparent chain allows separation of "tainted" funds and "clean" funds. Monero has no such ability to be distinguished between thus its immune from this fate.
Current evidence of this is that some exchanges like Binance will not accept ZCash UTXOs that have ever touched the shielded pool. Currently no central exchanges accept Bitcoin UTXOs linked to OFAC sanctioned addresses. If you coinjoin with one of these your non-KYC coin is now "tainted" and thus has less value due to its lower liquidity.
Does this argument follow? I'm stretching the limit of my ability to convince in this public setting. I'd love to discuss further if you reach out to me https://daedalus.website/contact.html
