Which 1720 speculation collapse is associated with the South Sea Company?

The 1720 speculation collapse associated with the South Sea Company is called the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with Spanish South America, although its actual trading opportunities were far more limited than many investors believed. In 1720, the company’s shares surged as the government converted part of the national debt into South Sea Company stock and public enthusiasm intensified.

The price later collapsed when investors sold shares and confidence broke. The crash ruined many investors and exposed abuses involving misleading promotion, insider dealing, and political influence. Parliament investigated the scandal, and several prominent figures were punished or disgraced.

The South Sea Bubble is often discussed alongside the Mississippi Bubble in France, which also burst in 1720. They were separate schemes and companies, although both illustrate how speculative excitement, financial innovation, and unrealistic expectations can inflate asset prices.