Which 1720 bubble burst after speculation in the South Sea Company collapsed in Britain?

The 1720 British speculation bubble that burst around the South Sea Company was the South Sea Bubble.

The South Sea Company was founded in 1711 and received a government-backed monopoly over British trade with Spanish South America, although its practical trading opportunities were limited. In 1720, investors became captivated by rising share prices and by plans to convert government debt into company shares.

The stock price climbed dramatically before confidence broke. By the end of 1720, the shares had collapsed, ruining many investors and provoking a major political scandal. Parliament investigated the company’s directors, and some officials were accused of corruption.

The South Sea Bubble occurred alongside France’s Mississippi Bubble, associated with John Law’s financial system. They are related episodes but not the same crash. The event became an enduring example of how promotional excitement, leverage, and unrealistic expectations can inflate financial prices.