Bitcoin was down Monday after the world's largest cryptocurrency rose to the highest levels since May over the weekend.
Bitcoin was off 6.2% to $39,226, according to CoinDesk. Ethereum was off nearly 1% to $2,578 while Dogecoin fell 3.6% to 0.007 cents.
"The past eight days seem to have improved market sentiment quite a bit," said Seth Ginns, managing partner at CoinFund, an investment firm that specializes in the Blockchain space. "Bad news is now being absorbed, and the good news is causing rallies, the opposite of the trading regime of the past few months."
James Edwards, the cryptocurrency specialist at Finder, said the rumor "triggered a short-squeeze on Bitcoin, which excited the retail market and brought them back into the fold."
"As such the entire market grew by 30% in just over a week with many altcoins showing gains far exceeding Bitcoin, Ethereum, and other blue-chip cryptos," he said.
The bipartisan infrastructure bill addresses cryptocurrency transactions. The bill seeks to extract $28 billion in tax from local stakeholders and Edwards said this triggered a mild selloff.
"Given the current influence of the news cycle, don’t be surprised if events in the Senate dictate price action between now and Aug. 9, when the bill is expected to be finalized," he said.
Winston Ma, CFA and former head of North American at China Investment Corp., China’s sovereign wealth fund, said that governments around the world have been stepping up their efforts to legislate the industry.
During last few days, Ma said, U.S. Congressman Don Beyer pushed the "overdue process" of updating crypto regulations, while in Malaysia, Binance was ordered to halt operations by Aug. 9.
"China's crypto mining and trading crackdown started in May was like the tipping point that urged regulators across the globe to accelerate crypto-related lawmaking in their own markets," said Ma, author of "The Digital War – How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace."