At the time, Britain was in a state of financial uncertainty, and many people were eager to invest in the South Sea Company, which promised high returns and was seen as a safe investment. The British government even endorsed the company, giving it a monopoly on trade with South America in exchange for taking on a portion of the national debt.

As a result of this endorsement and the promise of high returns, the price of South Sea stock skyrocketed, and people began investing large sums of money in the company. The bubble was fueled by speculation, as people invested in the hopes of making a quick profit.

However, the South Sea Company was unable to deliver on its promises of high returns, and in 1720, the bubble burst. The price of South Sea stock plummeted, causing many people to lose significant amounts of money and leading to a financial crisis in Britain. The South Sea Bubble is considered one of the first recorded financial bubbles in history and serves as a cautionary tale about the dangers of speculation and irrational exuberance in financial markets.