The South Sea Bubble

The South Sea Bubble was a financial crisis in early 18th century England, centered around the South Sea Company, which was created to trade with South America. Investors were excited by the potential for enormous profits, leading to sky-high stock prices. Speculation drove the bubble, as many bought shares hoping to sell them at a profit. Eventually, the company's actual profits fell short of expectations, causing panic and a dramatic crash in stock prices in 1720. Many lost their savings, and the event highlighted the dangers of speculative investing, leading to stricter regulations in financial markets.