The high cost of human sleep mode

A 2003 study found that the white-crowned sparrow can go weeks with very little sleep during their annual migration between Alaska and Mexico.

In some cases, birds were observed remaining alert for 24 hours straight. But only in the migration season. The rest of the year, they needed a full night’s sleep to stay fully alert during the day.

In a follow-up study, the same researchers kept a cohort of sparrows in a University of Wisconsin lab during migration season. There, they were taught to peck on a keyboard in a prescribed sequence in exchange for some delicious seeds. The sequence changed every day, but the sparrows were able to quickly relearn it — no matter how little sleep they were getting.

“Our results suggest that despite being adversely affected by sleep loss during the nonmigratory season, songbirds exhibit an unprecedented capacity to reduce sleep during migration for long periods of time without associated deficits in cognitive function,” the study concluded.

Why were sparrows that should have been vacationing in Mexico being subjected to typing tests in a Wisconsin lab?

The researchers hoped to discover how humans might maintain a similar level of cognitive performance without sleep: “An understanding of the mechanisms involved in migratory sleeplessness may lead to the development of methods to temporarily mitigate the effects of sleep deprivation that otherwise compromise performance in humans.”

What kind of humans the researchers had in mind goes unsaid.

But the acknowledgement section includes a strong hint: “This work was supported by the United States Department of Defense.”

Right. The US military, which has long tried to keep its sleep-deprived soldiers alert with drugs and stimulants, wants to know how the sparrows do it so naturally. 

As Jonathan Crary explains in 24/7: Late Capitalism and the Ends of Sleep, “The white-crowned sparrow study project is only one small part of a broader military effort to achieve at least limited mastery over human sleep.” 

Importantly, Crary believes the DoD’s findings will be applied well beyond the military:  “As history has shown, war-related innovations are inevitably assimilated into a broader social sphere.”

“The sleepless soldier,” he predicts, will be “the forerunner of the sleepless worker or consumer.” 

Or trader!

Last week, OKXICE, a joint venture between ​OKX and Intercontinental Exchange, announced plans to launch an exchange for trading US equities in tokenized form.

Being on a blockchain, the exchange won’t ever have to close.

"This is ​a landmark step toward a truly global, 24/7 Wall Street," said OKXICE co-chair and former New York Governor Andrew ​Cuomo.

(Don’t judge. He’s got bills to pay, I’m sure.)

NYSE, Nasdaq, ​and ⁠the London Stock Exchange are also expected to offer 24/7 trading sometime soon.

Will traders have to learn to live like sparrows then?

The exchanges say they’re moving to 24/7 trading so that 1) investors in every time zone have access to US equities during their local working hours and 2) traders everywhere can react to news immediately, whatever time of day or night it happens to come out.

As a former institutional equities trader, I have a professional response to that: baloney.

Liquidity in US equities during extended hours will be terrible — spreads will be wide and sizes will be tiny. 

If they have any sense, global investors will simply wait for normal US market hours to place their orders.

Traders should wait, too. It’s hard enough to make money during regular market hours when transaction costs are at their lowest. Making money in the evening or on weekends when transaction costs are far higher will be close to impossible.

Only the machines and market makers on the other side of your trades will make any money out of 24/7 trading.

But even if traders can resist the temptation to trade at odd hours, just knowing they could trade will be immensely stressful.

Markets that close give traders a chance to live a normal life: to see friends for dinner; go to a game; be present with their kids. (Or think about the bad choices that led them to a career in trading.)

Markets that never close, by contrast, will leave everyone involved perpetually on edge. No trader will sleep through the night knowing that something might be happening in one of their big positions. Or that they might be missing out on an opportunity to start some new positions. 

The philosopher Teresa Brennan would call this transition to 24/7 trading a case of “bio-deregulation” — her term for the disruption of biological imperatives — sleeping, eating, socializing — by an economic imperative to work or consume for ever more hours of the day.

As Brennan sees it, capitalism increasingly treats humans as if they’re sparrows.

Crary agrees, noting that the average American gets just six and a half hours of sleep a night — down from eight hours a generation ago and ten hours a generation or two before that.

The sleep isn’t as good, either. Crary cites research that finds “the number of people who wake themselves up once or more at night to check their messages or data is growing exponentially.” 

Today, he opines, we don’t sleep any better than the phones we’re constantly checking:

One seemingly inconsequential but prevalent linguistic figure is the machine-based designation of ‘sleep mode.’ The notion of an apparatus in a state of low-power readiness remakes the larger sense of sleep into simply a deferred or diminished condition of operationality and access. It supersedes an off/on logic, so that nothing is ever fundamentally ‘off’ and there is never an actual state of rest.

24/7 equity markets will force traders to be in a constant state of “low-power readiness” — never fully switched off, never fully asleep, never truly in a state of rest.

In other words, they’ll do the same thing to traders that AI agents are doing to software developers. 

The Wall Street Journal recently reported that agentic AI is forcing startup founders like Aditya Sharma to work harder than ever: “Because agents often require guidance or additional context as they move through their tasks, Sharma, 27, finds himself wanting to be available to them around the clock and forgoing a regular sleep schedule as a result.” 

For Sharma, sleep is now an opportunity cost.

“The cost of the agents’ being blocked for eight hours is way too high,” he told the Journal. “They can be done with their work at any point of time.”

Which means he has to be ready to respond at any point of time — always on standby, just in case his agents need something from him.

This is the fate that awaits traders when genuine equities start trading on blockchains.

“Most TradFi traders will curse the blockchain until the end of their days,” one TradFi-turned-crypto trader told Bloomberg. “It’s the constant possibility of something that can happen that lingers in the air.”

It will be stressful.

But maybe sparrows can learn to peck on a trading keyboard, too.

— Byron Gilliam