Bitcoin shattered records on Monday by crossing the $120,000 mark for the first time, reaching a peak of $123,153.22 as investor optimism surged over potential policy shifts in the U.S. aimed at supporting the cryptocurrency sector. The milestone came as lawmakers in Washington gear up for what has been dubbed “crypto week,” a pivotal period for digital asset regulation.

The world’s most valuable cryptocurrency later eased slightly but remained up 0.5% at $119,750.86, bringing its year-to-date gains to more than 27%.

The rally is being fueled by mounting expectations that the U.S. House of Representatives will pass a series of pro-crypto bills this week, including the highly anticipated Genius Act. This legislation is expected to establish a comprehensive federal framework for stablecoins, a step the industry has long sought.

Former President Donald Trump has added fuel to the fire, branding himself the “crypto president” and pledging to overhaul regulations in favor of the digital asset industry. Trump has also personally ventured into the space, backing a crypto project called World Liberty Financial and launching his own meme coin earlier this year.

“Bitcoin is riding a wave of momentum,” said Tony Sycamore, a market analyst at IG. “There’s institutional demand, policy optimism, and Trump’s vocal support—all of which are creating a perfect storm for price growth. It wouldn’t be surprising to see it test $125,000 soon.”

While Bitcoin led the charge, the broader crypto market followed suit. Ethereum (Ether) reached $3,081.94—its highest level since early February—though it remains down over 10% for the year. XRP also saw notable gains, rising 2.7% after an intraday high of 6.4%.

The total market capitalization of the cryptocurrency sector has now ballooned to roughly $3.8 trillion, according to CoinMarketCap.

Despite the fanfare, not all crypto assets were on the rise. Trump’s meme coin, which saw a peak of around $75 shortly after its January launch, fell 3.4% on Monday to $9.45. Meanwhile, crypto mogul Justin Sun revealed he had purchased an additional $100 million worth of the $TRUMP token, further stoking controversy. The White House has yet to respond to inquiries about Sun’s investment.

Simon Peters of eToro pointed out that Bitcoin’s new record was largely driven by a weakening U.S. dollar, noting that the cryptocurrency has not hit similar highs in other major currencies such as the euro.

In U.S. markets, crypto-related stocks and ETFs also surged. Shares of Coinbase rose 1.8%, crypto miner Mara Holdings gained 0.1%, and bitcoin-holding firm Strategy climbed 3.5%. Hong Kong-listed spot bitcoin ETFs from China AMC, Harvest, and Bosera also reached record highs.

While analysts at Oppenheimer remain cautious about Coinbase ahead of its July 31 earnings report, they raised their price target to $417 per share, up from $395, citing potential long-term upside.

As Congress prepares to vote on multiple crypto-related bills—including the Clarity Act and the Anti-CBDC Surveillance State Act—market watchers are closely monitoring how regulatory developments could shape the next phase of growth for digital assets.