Bitcoin reached a new record high on Wednesday, surpassing $109,481, driven by pro-crypto policies, subsiding tariff concerns, and renewed investor risk appetite. This milestone eclipses the previous high set in January, marking a significant moment for the world's largest cryptocurrency.

Enthusiasm around recent regulatory developments has played a crucial role in this surge. A landmark crypto bill, known as the GENIUS Act, has progressed in Congress with bipartisan support, aiming to regulate the stablecoin market. This legislative advancement signals growing acceptance of cryptocurrency within the government.

Policy support extends beyond Congress, with pro-crypto executive orders and the creation of crypto reserves in New Hampshire and Arizona further boosting Bitcoin's appeal. Institutions increasingly view Bitcoin as a valuable portfolio diversification tool, contributing to a favorable long-term investment outlook.

The broader rally in risk assets, coinciding with a weakening dollar, has also benefited Bitcoin. With a nearly 17% year-to-date increase, analysts predict further gains. Standard Chartered anticipates Bitcoin reaching $120,000 in the second quarter, while some options traders foresee a surge to $300,000 by the end of June.

Increased involvement from traditional financial firms is another contributing factor. JPMorgan CEO Jamie Dimon's acknowledgment that clients can buy Bitcoin, and Coinbase's inclusion in the S&P 500, reflect growing mainstream acceptance. However, Coinbase also faces challenges, with the U.S. Department of Justice investigating a recent data breach.

The digital currency had previously slumped to around $76,000 in early April due to investor concerns about tariffs and their potential economic impact. The current rally indicates a shift in sentiment, driven by optimism that the Trump administration and crypto-supportive lawmakers will implement policies benefiting the asset class. This renewed confidence has also lifted shares of crypto-related firms like MicroStrategy, Coinbase Global, MARA Holdings, and Riot Platforms.