Bitcoin (BTC-USD) climbed above $97,000 on Wednesday as optimism over the potential for a legislative tailwind for the crypto market grew.

The token jumped more than 3% after US senators released a draft bill that would create a regulatory framework for the crypto industry, including clarifications surrounding regulators’ jurisdiction.

Crypto advocates have long pushed for such regulation, especially following last year’s landmark legislation on stablecoins. They believe that a broader regulatory framework for digital assets could be the catalyst needed for tokens to outperform the broader market after a dismal fourth quarter performance.

“Overall great progress,” said Sean Farrell, head of digital assets at Fundstrat, on Tuesday night of the draft bill. “And I think it is a solid tailwind for altcoins and for crypto financial services companies in the US. “

Ether (ETH_USD), the native token of Ethereum, a major blockchain used for tokenization, jumped 5%. Meanwhile, solana (SOL-USD) rose 2%.

Despite the rally, some industry analysts are not convinced that the bill will pass this year.

“With the prior stablecoin legislation, the industry was really united,” Paul Brody, EY’s global blockchain leader, told Yahoo Finance.

“Here, the crypto natives and the banks — there is daylight between the two parties. They’re not all pulling in the same direction the way they were with the stablecoin bill.”

Bitcoin has rallied 10% year to date after a losing fourth quarter last year. Heavy selling from long-term holders and significant deleveraging pushed prices down from an October high of around $126,000 to around $88,000 by year-end.

Following three consecutive months of losses, analysts were optimistic of a January bounce.

“In the near term, Bitcoin is encountering resistance around $98,000, which corresponds to the 21-week moving average, a level we treat as an important bull/bear regime indicator,” 10X Research said in a note on Wednesday.

10X added, “However, with multiple weekly indicators still well below their overbought thresholds, we believe the rally has scope to extend further and ultimately push Bitcoin back above $100,000.”

Institutional demand is expected to be the key catalyst driving prices higher as inflows into spot exchange-traded funds continue to rise.

“When HODLers’ [long-term holders] cyclical selling eventually stops, we believe institutional buying can propel BTC back to record highs,” Compass Point’s Ed Engel wrote in a note earlier this month.