The South Sea Bubble collapsed in 1720 after the South Sea Company’s shares soared in Britain.
The South Sea Company was granted trading privileges and took on part of the British government’s debt. Investors were attracted by optimistic claims about the company’s commercial prospects, and its share price rose dramatically during the first half of 1720.
The boom encouraged speculation in other ventures, including fraudulent or exaggerated schemes. When confidence weakened, South Sea shares fell sharply, ruining many investors and creating a political scandal. Parliament investigated the company’s directors and several officials.
The South Sea Bubble was one of the most famous early speculative manias, alongside France’s Mississippi Bubble, which also collapsed in 1720. It predates modern stock exchanges and does not map perfectly onto a modern market crash, but it remains a major historical example of debt-fuelled speculation, promotional hype, and collapsing confidence.