Data from The Block reveals that as of May 2024, hedge funds have adopted a significantly bearish stance on Bitcoin, holding the largest net short positions in CME Micro Bitcoin Futures since late 2021. These micro contracts, each representing 0.1 BTC, allow traders to gain precise exposure with lower capital requirements compared to the standard CME Bitcoin Futures, which represent 5 BTC per contract.

A chart from The Block shows that hedge funds have substantially increased their short positions in these micro contracts, indicating a cautious or bearish outlook despite Bitcoin's strong year-to-date performance, rising from $40,000 to over $68,000. Hedge funds were similarly short during Bitcoin's all-time high in March. Conversely, other trader categories, such as asset managers and non-reported traders, have maintained relatively stable positions.

The rise in hedge fund shorting in micro futures suggests they are hedging against potential downside risks, even as the spot market remains bullish.

In contrast, hedge funds' long positions in CME Micro Bitcoin Futures are relatively low compared to levels during Bitcoin's all-time high in March, according to The Block.

Data from Coinglass indicates that the total open interest in CME Bitcoin futures, which includes both micro and standard contracts, is approximately $11 billion. CME is the leading exchange for Bitcoin futures trading.