The 1720 British financial bubble involving the South Sea Company was the South Sea Bubble.
The South Sea Company received a monopoly over British trade with parts of Spanish South America in exchange for taking on government debt. Investors became excited by exaggerated expectations about the company’s commercial prospects, and its share price rose dramatically during 1720.
The boom encouraged imitation and speculation in other ventures. When confidence turned, South Sea shares collapsed, ruining many investors and exposing misleading promotions and insider dealing. Parliament investigated the scandal, and several prominent figures were implicated.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also burst in 1720. They were separate schemes and companies, although both were tied to ambitious financial plans involving government debt and colonial trade. The South Sea Company did not create the Mississippi scheme.