The 1720 speculative collapse involving the South Sea Company was the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America and proposed converting government debt into company shares. Investors were attracted by optimistic claims about commercial riches, while the company’s rising share price encouraged further speculation.
Shares rose dramatically during 1720 before collapsing later that year. The company had limited real trading success, and the boom depended heavily on expectations, promotional schemes, and easy participation in the share market. Parliamentary investigations followed the collapse.
The South Sea Bubble is often discussed alongside John Law’s Mississippi Bubble in France, which also burst in 1720 but was a separate episode. Neither event was a modern exchange crash in the same sense as a one-day twentieth-century market plunge; both were major early examples of speculative bubbles.