Bitcoin and most other cryptocurrencies extended a recovery on Friday on reports that Russian President Vladimir Putin was willing to hold high-level negotiations with Ukraine.

Crypto market shows signs of recovery

The Independent said Chinese state broadcaster CCTV had reported that Putin discussed the potential negotiations in a call with his Chinese counterpart Xi JinPing. The news could herald a potential de-escalation in the Russia-Ukraine conflict, which has roiled financial markets this month.

Bitcoin rose 10% to near $40,000, while altcoins including Ethereum and XRP logged double-digit gains. Markets had rallied overnight after sanctions against Russia, imposed by Washington, stopped shy of blocking the country from the global financial system.

“The United States and NATO  have long ignored Russia’s reasonable security concerns, repeatedly reneged on their commitments, and continued to advance military deployment eastward, challenging Russia’s strategic bottom line,” Putin told Xi.

“Russia is willing to conduct high-level negotiations with Ukraine.”

Any dialogue between Moscow and Kyiv is likely to be welcomed by financial markets. Russia’s invasion had rattled crypto, knocking as much as $500 billion from market capitalization this month. Sentiment had also been battered into “extreme fear.”

Russian troops had come as close as Ukraine’s capital on Thursday amid constant fighting with Ukraine forces. Russia’s move was widely condemned by global leaders, and had also invited economic sanctions from Japan, Canada and the European Union.

Still, analysts had seen minimal economic impact from restrictions against Moscow. The country was still allowed to trade on SWIFT, a global transaction system, which provided some relief to markets fearing widespread economic repercussions.

Crypto markets had surged in line with equities overnight. But safe-haven stablecoins accounted for more than half of overall volumes, indicating that sentiment was still cautious.

Tether had the largest volumes among its peers in the past 24 hours, at about $62 billion.

Conventional safe-havens including gold and the dollar slightly retreated, while oil prices, which had shot up on the prospect of Russian supply disruptions, fell below $100 a barrel.

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