Which British financial bubble burst in 1720 after Parliament passed the Bubble Act?

The South Sea Bubble burst in 1720 after speculation in the South Sea Company collapsed.

The company received a monopoly over British trade with Spanish South America in 1711, although the practical trading opportunities were far smaller than many investors imagined. It also took on government debt, helping connect its shares to public finance and political influence.

Share prices surged as promoters encouraged optimism and investors chased rapid gains. The Bubble Act of 1720 restricted the formation of joint-stock companies without a royal charter, but it did not prevent the South Sea Company from continuing its promotion. When confidence broke, prices fell dramatically.

The South Sea Bubble became a classic example of speculative excess, insider dealing, and leverage. It is often grouped with the Mississippi Bubble in France, but those were separate schemes that crashed in the same broad period.