Which London stock exchange bubble burst in 1720, becoming an early famous stock-market crash?

The South Sea Bubble burst in 1720, becoming one of the earliest famous stock-market crashes.

The South Sea Company had received a British monopoly over trade with Spanish South America, although its realistic trading opportunities were far more limited than promotional claims suggested. Its shares rose dramatically as investors were encouraged to believe that enormous profits were imminent. The company also absorbed government debt in exchange for shares, tying speculation to public finance.

When confidence failed, the share price collapsed. Thousands of investors suffered losses, and the scandal damaged trust in company promotion and financial management. Parliament investigated the affair, and several directors and politicians faced accusations of corruption.

The South Sea Bubble is often mentioned alongside the Mississippi Bubble in France, which also collapsed in 1720. They were separate schemes, although both reflected the same era’s enthusiasm for speculative joint-stock companies. Tulip Mania, another frequently paired example, occurred earlier in the Dutch Republic and involved bulbs rather than a stock exchange company.