The South Sea Bubble

In 1720, shares of the South Sea Company — a British joint-stock company granted a monopoly on trade with South America — rose from around £100 in January to over £1,000 by June, driven by speculation, insider manipulation, and wild promises of profit. Even Isaac Newton invested, initially making a profit before buying back in at the peak. When the bubble burst in September, the stock crashed to £150, wiping out fortunes across British society. Newton lost £20,000 (roughly £4 million today) and reportedly said, "I can calculate the movement of the stars, but not the madness of men." Parliament investigated, several company directors were arrested, and the crash led to banking reforms. The South Sea Bubble became the archetype of speculative mania — a pattern that would repeat with tulips, railways, dot-coms, and crypto.