South Sea Bubble

The South Sea Bubble was a financial crisis in early 18th-century Britain around 1720, caused by excessive speculation in the shares of the South Sea Company. Investors believed the company would profit significantly from trade in the South Seas, leading to skyrocketing stock prices. However, these expectations were inflated and not backed by real economic value. Eventually, confidence waned, and share prices collapsed, causing many investors to suffer heavy losses. The bubble highlighted the dangers of speculative mania and contributed to increased government regulation of financial markets.