The South Sea Bubble was the 1720 English bubble involving the South Sea Company and its South American trade monopoly.
The company was founded in 1711 and received rights connected with British trade to Spanish South America. In practice, its commercial opportunities were far more limited than many investors imagined. Its shares nevertheless rose dramatically in 1720 as speculation and promotional enthusiasm spread.
The company also proposed converting government debt into shares, linking public finance with the speculative boom. Prices climbed from about £128 in January 1720 to roughly £1,000 in August. They then collapsed by the end of the year, ruining many investors.
The South Sea Bubble occurred alongside John Law’s Mississippi Bubble in France. Both episodes are often grouped among the earliest famous speculative bubbles, but they were separate schemes in different countries. The crisis produced political scandal and parliamentary investigations in Britain.