Which 1720 speculation episode is widely regarded as the first major stock-market crash?

The South Sea Bubble is widely regarded as one of the first major stock-market crashes.

The episode centered on the South Sea Company, founded in England in 1711. The company received a government-backed monopoly over trade with parts of Spanish America, but its commercial prospects were much less impressive than the expectations surrounding its shares.

In 1720, enthusiasm drove the company’s share price dramatically higher. Investors included aristocrats, professionals, and ordinary savers, while promotional claims and easy credit encouraged speculation. When confidence reversed later that year, the price collapsed, ruining many investors and causing political scandal.

The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, which also burst in 1720. Tulip mania in the Dutch Republic occurred earlier, in the 1630s, but it involved bulbs and contracts rather than a modern joint-stock company’s publicly traded shares. The South Sea episode therefore has a particularly direct connection to stock-market speculation.