The 1720 English speculative bubble was the South Sea Bubble, a collapse centered on shares of the South Sea Company.
The company received a government-backed monopoly over trade with Spanish South America, although its realistic trading prospects were far more limited than many investors believed. In 1720, the company proposed converting government debt into shares, and enthusiasm drove its share price dramatically higher. Investors included members of Britain’s political and financial elite.
The boom unraveled later that year as doubts about the company’s value spread and selling intensified. The collapse ruined many investors and created a major political scandal. Parliament investigated corruption, and several directors were punished. The South Sea Bubble is often discussed alongside John Law’s Mississippi Bubble in France, which also burst in 1720. Neither event was a modern exchange crash in the electronic sense, but both are classic examples of speculative finance, leverage, and crowd psychology.