Which 18th-century London stock bubble burst in 1720 after investors rushed to sell?

The South Sea Bubble was the 18th-century London stock bubble that burst in 1720.

The South Sea Company received a government-backed monopoly over trade with parts of Spanish America and assumed some British government debt. Its shares soared as investors imagined enormous commercial profits, even though the company’s actual trading opportunities were limited.

Speculation spread through London, and many buyers borrowed money or purchased shares through increasingly risky arrangements. When confidence weakened, selling accelerated and the share price collapsed before the end of 1720. Numerous investors suffered major losses, including prominent figures.

The South Sea Bubble is often discussed alongside the Mississippi Bubble in France, which also collapsed in 1720. They were separate schemes, though both illustrated how credit, persuasive promises, and speculative enthusiasm could inflate prices far beyond underlying business results.