The South Sea Bubble was the 1720 British market collapse driven by speculation in the South Sea Company.
The company received a government-backed arrangement involving British national debt and a supposed opportunity to trade with Spanish-controlled South America. Investors were attracted by ambitious claims, even though the company’s realistic trading prospects were limited.
Its share price rose dramatically in 1720 before falling later that year. The collapse ruined many investors and caused a political scandal because influential figures had promoted or benefited from the scheme.
The bubble was part of a wider European speculative episode that also included France’s Mississippi Company. These events helped shape later debates about financial promotion, insider dealing, corporate disclosure, and government regulation.