The 1720 British financial bubble was called the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America, although its actual trading prospects were far more limited than many investors believed. The company also assumed part of Britain’s national debt, helping its shares become closely tied to public finance and political influence.
Its share price rose dramatically in 1720 as investors anticipated enormous profits. Speculation spread beyond the company itself, and Parliament passed the Bubble Act that year to restrict unauthorized joint-stock companies. When confidence broke, South Sea shares plunged, ruining many investors and exposing influential figures to scandal.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same general period. They were separate schemes, however. The episode helped shape later British attitudes toward speculation, corporate promotion, and government-backed finance.