What was the name of the speculative bubble that burst in London in 1720?

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The speculative bubble that burst in London in 1720 was the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with Spanish South America, although its actual commercial opportunities were far more limited than many investors believed. The company also took on British government debt, and its shares became the focus of intense speculation.

Share prices rose dramatically during 1720 as investors expected enormous profits. Promotional claims, easy credit, and imitation companies helped spread the boom. When confidence turned later that year, the shares collapsed, ruining many investors and creating a political scandal in Britain.

The South Sea Bubble is often grouped with the Mississippi Bubble in France, which also burst in 1720. They were separate schemes, however. The South Sea episode helped prompt parliamentary investigations and reforms, while the collapse became a classic example of how expectations, leverage, and herd behavior can inflate asset prices far beyond underlying business prospects.

Source: Wikipedia · fact-checked Sept. 2026

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