The 1720 British speculative bubble was the South Sea Bubble.
The South Sea Company received trading privileges and assumed part of the British government’s debt. Investors were attracted by optimistic claims about the company’s potential commerce with Spanish America, although its actual trading prospects were far more limited than many believed. Its shares rose dramatically during 1720, drawing in aristocrats, merchants, and ordinary savers.
Parliament’s Bubble Act restricted many competing joint-stock companies, but it did not prevent the South Sea Company’s collapse. By late 1720, the share price had fallen sharply, ruining many investors and damaging public confidence in speculative ventures. The episode became one of the best-known financial manias in British history.
The South Sea Bubble is often discussed alongside the Mississippi Bubble in France, which also collapsed in 1720. Neither event was the same as the Dutch tulip episode of the 1630s, and the South Sea Company did not cause a modern stock-market crash in the technical sense.