Bitcoin reached a new record high on Sunday, rising above the $125,000 mark.

The cryptocurrency reached $125,689, shooting above its previous August record of around $124,500.

Bitcoin has enjoyed a strong upward momentum with investors cautious about the US government shutdown.

Gains in US shares have also supported bitcoin's rise, while investors have looked to safe haven assets while US lawmakers negotiate over funding the federal government, Bloomberg News said.

US President Donald Trump and his family have also been big promoters of cryptocurrencies and are involved in various crypto endeavours that have inflated his wealth.

Trump's embrace of digital assets has reversed years of US government scepticism towards the crypto industry under his Democratic predecessor Joe Biden, with the US House of Representatives passing three landmark cryptocurrency bills in July.

These regulatory changes have seen the value of bitcoin soar.

"With many assets including equities, gold and even collectibles like Pokemon cards hitting all time highs, it's no surprise Bitcoin is benefiting from the dollar debasement narrative," Joshua Lim, co-head of markets at crypto prime brokerage firm FalconX, was quoted by Bloomberg News as saying.