The 1720 British speculative bubble and crash centered on government debt trading was the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with parts of Spanish South America, although its actual commercial opportunities were much more limited than promotional claims suggested. In 1720, the company also took on a large portion of Britain’s government debt, helping make its shares appear politically important and financially attractive.
Share prices rose rapidly as investors expected enormous profits. The boom encouraged copycat promotions and fraudulent or highly speculative companies. When confidence weakened later in 1720, prices collapsed, ruining many investors and causing a major political scandal in Britain.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which burst around the same time under John Law’s financial system. They were separate schemes, although both demonstrated how credit expansion, promotional storytelling, and crowd psychology can fuel market bubbles.