The South Sea Bubble was the 1720 speculative bubble involving the British South Sea Company, which held a monopoly over certain trade with Spanish South America.
The company received a government charter and took over part of Britain's public debt in exchange for shares and commercial privileges. Investors became excited by exaggerated expectations about the wealth available through South American trade, even though Spain controlled access to much of the region and actual commerce was limited.
South Sea Company shares rose dramatically during 1720 before collapsing later that year. The episode spread beyond the company itself as investors speculated in other ventures, including fraudulent or unrealistic schemes. Parliament investigated the affair, and several prominent figures were implicated in corruption.
The South Sea Bubble is often discussed alongside France's Mississippi Bubble, which also collapsed in 1720. They were separate schemes, although both showed how government finance, monopolies, credit, and crowd speculation could combine to inflate asset prices.