The 1720 British speculative collapse involving the South Sea Company is known as the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America, although its actual commercial prospects were limited. Investors were attracted by promotional claims and by a scheme allowing the company to assume part of Britain's national debt.
Its shares rose dramatically during 1720, reaching about £1,000 before confidence broke. Selling accelerated, and the price fell to roughly £100 by the end of the year. The collapse ruined many investors and caused a major political scandal.
The South Sea Bubble is often discussed alongside France's Mississippi Bubble, which also burst in 1720. The two episodes helped establish the word “bubble” as a lasting term for a speculative boom followed by a collapse.