This week in prediction markets:

In the week since President Joe Biden stepped down as the Democratic party candidate, his running mate Kamala Harris has effectively doubled the chances of a Democrat taking the White House, moving the odds to 38% from 18%.

Harris’ gains in the Polymarket polls appear to be from small, individual bets entering the market.

Trump’s bettors, however, seem to have more conviction: the top five holders of the ‘Yes’ side of Trump’s contract hold a collective 9.1 million shares, which will resolve to a pot of $9.1 million if Trump wins. Meanwhile, the top five holders of the ‘Yes’ side of the Harris contract have a total of 4.7 million shares.

All-in-all bettors have staked $423 million on the outcome of the Presidential race.

The largest holder of the ‘Yes’ bet of the Trump contract is also the biggest holder of the ‘No’ side of the Harris contract.

This user, who goes by the handle ‘Larpas,’ is set to win $3.38 million should Trump, not Harris, win the election.

The betting market is set to heat up heading into November’s election as the crypto community leans more toward the idea that a vote for Harris is a vote against the digital asset industry while the democrats look for ways to side with the crypto industry.

Another point to note: leverage is coming soon to Polymarket, which may lead to traders opening up larger positions in order to reap more rewards.

Trading with leverage for much larger rewards already exists outside the betting market, which was one of the selling points of PoliFi tokens. But with many of these in the red, it’s questionable if the market has continued interest in this asset class.

China’s earlier stance in the digital industry helped bitcoin mature, with some of the earliest bitcoin exchanges like BTC China and Binance calling the country home.

But China’s relationship with bitcoin is complicated.

While crypto exchanges are banned in Mainland China and financial institutions are prohibited from interacting with virtual currencies, owning crypto and trading it peer-to-peer is not prohibited.

There’s now a growing belief that Mainland China will remove the crypto ban and allow exchanges to once again set up shop in the region while letting investors participate in the Hong Kong-listed crypto exchange-traded funds (ETFs).

The market, however, is skeptical.

Bettors on Polymarket say there’s only a 13% chance it could happen by the end of 2024.

Despite calls from stakeholders like Justin Sun, who recently posted on X that “China should make further progress in this area” after Trump proposed a national strategic bitcoin reserve at BTC 2024 in Nashville, Mainland China fully embracing bitcoin would be a complicated affair.

The main issue is that Beijing maintains Yuan stability through strict capital controls, regulating money flows to prevent currency fluctuations and capital flight. If the ban is lifted, it would allow mainland Chinese traders to bypass these controls, undermining the Yuan’s stability. Capital flight already exists in China, and allowing crypto trading would just accelerate it.

Polymarket bettors seem to understand this, which is why they are only giving it a 13% chance of happening.

At the start of the year, the crypto market was soaring, and Coinbase’s transaction volume reflected this. At the time, crypto trading was on track to hit its busiest pace since June 2022, CoinDesk reported.

Though, as the year continued, crypto’s monthly trading volume subsided as retail euphoria about the ETF approval waned.

Bettors in Kalshi prediction markets are forecasting that Coinbase’s volume will hit $164.8 billion for the quarter, down significantly from the $312 billion from last quarter. Bettors are only giving it a 25% chance that it will be above $250 billion.

Right now, such a dramatic drop doesn’t seem to be reflected in Coinbase’s stock (COIN). Market data shows it’s up 4% in the last month but down 6% in the last trading week. Traders are likely to take note of this volume drop and sharpen their pencils, heading into the crypto exchange’s earnings on Aug. 1