Which 1720 British speculative bubble ended when confidence in the South Sea Company collapsed?

The 1720 British speculative bubble ended when confidence in the South Sea Company collapsed, producing the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish South America, although its actual trading opportunities were limited. In 1720, the company proposed converting government debt into its shares. Promotional claims and rising prices attracted investors across British society.

Shares climbed from about £100 in early 1720 to more than £1,000 in August. The price then collapsed as investors sold and confidence disappeared. Banks and individuals suffered heavy losses, and Parliament investigated corruption surrounding the scheme.

The South Sea Bubble occurred alongside John Law’s Mississippi Bubble in France, but they were separate companies and markets. The term bubble is now used for any asset-price boom driven partly by speculative expectations rather than sustainable fundamentals. The episode became a lasting warning about leverage, insider influence, and crowd enthusiasm.