Bitcoin's anonymity is likely to weaken due to increasing regulatory compliance demands. While Bitcoin transactions are pseudonymous, not fully anonymous, governments and financial institutions are pushing for stricter KYC (Know Your Customer) and AML (Anti-Money Laundering) rules. These require exchanges and wallet providers to collect user data, linking identities to wallet addresses. Chain analysis tools can further trace transactions, reducing privacy. For instance, regulations like the EU's MiCA and U.S. FATF guidelines aim to enhance transparency in crypto transactions. However, privacy-focused solutions like mixers or layer-2 protocols (e.g., Lightning Network) may counter this trend, though they face scrutiny. As compliance tightens, Bitcoin's pseudonymous nature could shift closer to traditional financial systems, balancing user privacy with regulatory oversight.