The 1720 British speculative bubble that ended in a major stock-market crash was the South Sea Bubble.
The South Sea Company received a government-backed trading monopoly and took on part of Britain’s public debt. Its shares rose dramatically during 1720 as investors expected enormous profits from trade with Spanish America. The company’s actual commercial opportunities were far smaller than the excitement suggested.
When confidence broke, the share price collapsed, ruining many investors and causing political scandal. Parliament investigated the company’s directors and several officials. The episode helped establish the South Sea Bubble as one of history’s most famous examples of speculative excess, misleading promotion, and crowd behavior.
The South Sea Bubble happened in the same year as the French Mississippi Bubble, but they were separate schemes. Tulip Mania was an earlier Dutch speculative episode involving bulbs rather than shares in a modern-style public company. These events are often grouped together, but their markets and institutions differed.