Bitcoin bulls are back after many weeks of waiting, judging by the market’s impressive gains since the start of August. However, the recently proposed infrastructure bill which seeks to institute a regulatory path for the cryptocurrency market might be the proverbial wrench that might prevent the crypto engines from revving to the moon.

Bitcoin’s latest price action is exciting because it highlights the return of the highly anticipated bullish wave after a relatively bearish period since May. To recap, analysts expect the price of Bitcoin to reach as high as $100,000 and potentially higher. However, the market correction that took place in May sent the market on an opposite trajectory, with Bitcoin falling by more than half from its all-time high of $64,000 to as low as $28,805.

Bitcoin’s rally has so far sent it back above $45,000 which many people have interpreted as a sign for the next major bull run. The cryptocurrency is currently trading at $45,705.44 after registering a 1.93% gain in the last 24 hours and a 16.31% weekly gain at the time of this press.

Source: Binance

BTC’s price action reflects strong buying volumes and even at its current price it still has some ceiling room before it enters the oversold zone. The fact that it is also back above the 7-day, 25-day, and 99-day moving average is a strong confirmation that the bulls are back in control. However, their dominance might be threatened by the ongoing attempts to introduce more regulations into the crypto space.

What does the Infrastructure bill mean for the crypto market?

One of the most controversial aspects of the US Infrastructure bill is that it plans to introduce more surveillance for crypto holders. The bill seeks to roll out mass surveillance on all the parties involved in crypto, including developers, exchanges, and DeFi protocols that will henceforth be considered brokers. If the bill is passed into law, it would allow the U.S government to have more control over the crypto market and enforce strict taxation policies.

The bill initially proposed that proof of work cryptocurrencies such as Bitcoin would be exempt from the surveillance. However, some amendments made so far plan to extend the exemption to projects and cryptocurrencies that run on a proof of stake consensus mechanism. However, if the bill is passed, it might spread FUD across the market, leading to another potential market crash.

The bill has received a lot of criticism because it seems like the regulators do not understand how the crypto market works. Otherwise, they would not have considered regulating cryptocurrencies based on the consensus mechanism used. The move has instead been translated as a fumbled attempt at metering cryptocurrencies while having a tighter grip on the market. Unfortunately, such measures would only block some crypto projects from achieving their full potential and possibly lead to the death of most crypto projects.

What to expect from Bitcoin moving forward

Bitcoin’s current rally might be the big bull run that we have been waiting for. Recent crypto funds suggest that institutional money has been flowing into the market, explaining the recent gains. However, FUD events could cap its rally and possibly lead to another major crash in the short run, although Bitcoin’s long-term outlook still looks healthy.