The South Sea Bubble collapsed in 1720, making that year central to one of the earliest major stock-market crashes.
The South Sea Company received trading privileges and took on part of the British government’s debt. Its shares rose dramatically as investors imagined enormous profits from overseas commerce, although the company’s actual trade prospects were far less impressive than the speculation suggested. Credit expansion and imitation bubbles helped push prices to unsustainable levels.
By late 1720, confidence had broken down and the share price collapsed. Many investors suffered ruin, including prominent figures such as Isaac Newton. The episode is often discussed alongside the Mississippi Bubble in France, which also burst in 1720, but the two were separate schemes in different countries.