Bitcoin was created by Satoshi Nakamoto, to be a decentralized digital currency in the hands of people, so that they will have total control over the Bitcoin that they hold. Bitcoin gives it's holders freedom and privacy of transactions, so that third parties like Banks and governments cannot interfere. But the decentralization of Bitcoin has been a big concern for many governments around the world.
It's true that inasmuch as Bitcoin is a decentralized digital currency which is not controlled by third party, let's not forget that those who uses non custodial wallets do have full control over there fund, unlike Bitcoins on Centralized exchanges, which is why it's always advisable people uses crypto wallets where they own the private key. However, over the years, government policies have also been known to have slight influence over the price movement of Bitcoin when an unfavorable policies are made against mining companies and most especially centralized exchanges, which I'm sure must have prompted the crypto community to support Donald Trump when he gave his support to crypto. So in a nutshell, Bitcoin is still decentralized, but it depends on what type of wallet it's been kept.
It depends on whether you have linked your wallet and submit KYC also. Because if you have submitted KYC on some other platforms, you are just as compromised as Diddy would force you to bend down because they have a video of you holding a dick.
The regulation is making Bitcoin centralized yet it can be decentralized when you get out of the system and complete no IDs to your wallet and just trade on DEX. Or just make business out of any platform that requires KYC and that means out of the regulation.