Which 1720 English bubble burst after shares of the South Sea Company collapsed?

The 1720 English bubble that burst after South Sea Company shares collapsed was the South Sea Bubble.

The South Sea Company received a government monopoly over British trade with Spanish South America and took on government debt in exchange for shares. Promotional claims about the company’s commercial prospects helped drive its share price from about £100 in January 1720 to more than £1,000 by August.

The price could not be sustained. As confidence weakened, selling spread and the shares fell dramatically by the end of 1720. Investors, including prominent figures, suffered major losses. Parliament investigated the collapse, revealing corruption and improper promotion connected with the scheme.

The South Sea Bubble happened alongside John Law’s Mississippi Bubble in France, but they were separate schemes. The episode helped establish “bubble” as a lasting financial metaphor for prices rising far beyond underlying economic value.