The South Sea Bubble was the 1720 English speculative bubble centered on shares of the South Sea Company.
The company received rights connected with British trade in Spanish America and also became involved in managing part of the government's debt. Investors expected enormous profits, and its share price rose dramatically during 1720. Speculation spread beyond the company itself as promoters launched other ventures and people sought quick gains in a market with limited disclosure and weak investor protections.
When confidence broke later that year, the share price collapsed, ruining many investors and provoking political scandal. Parliament investigated the company's directors and associated corruption. The South Sea Bubble is often discussed alongside France's Mississippi Bubble, another major speculative episode of 1720, but they were separate schemes in different financial systems. The episode helped establish the phrase “bubble” as a lasting term for markets driven far above sustainable expectations.