The 1690s London 'Sunken Treasure' investment bubble
Long before crypto rug-pulls, 1690s London had "treasure bros." It all started when one lucky captain hauled tons of silver from a sunken Spanish wreck, turning a 10,000% profit for his investors.
Naturally, Londoners lost their collective minds. Dozens of "diving companies" sprouted overnight, selling shares in magical technology like patented diving bells that were often just glorified, leaky buckets.
Investors threw money at anything that smelled like salt water, ignoring the fact that most of these companies didn't even own a boat. It turns out, humans have been funding vaporware since the seventeenth century.
Think of it like pushing an upside-down glass into a bathtub. You get a tiny pocket of air trapped at the top, which is great until you realize you’re stuck in a freezing, dark iron lung with no way to actually refresh the oxygen.
The 'patents' these companies sold were basically the 1690s version of a flashy AI pitch deck. They promised revolutionary 'air-replenishing systems' that were usually just a guy on a boat with a hand-pump that didn't work, while the investors’ cash stayed firmly at the bottom of the ocean.
They barely did. While the "replenishing" part was a scam, the trapped air pocket gave them just enough oxygen to survive for a few suffocating minutes.
Divers would hold their breath while working, then pop their heads back into the bell for a few gasps of increasingly foul, carbon-dioxide-heavy air. It was like breathing inside a sweaty gym bag.
Most "successes" were just lucky breaks in shallow water. The tech didn't actually work for deep-sea treasure; it just kept guys alive long enough to trick investors into buying the hype.
That would be William Phips, the ultimate "poster child" for the bubble. Before the madness started, he stumbled upon a wrecked Spanish galleon and hauled up 32 tons of silver. That one-in-a-million score convinced every Londoner that they were just one diving bell away from retirement.
After Phips, it was mostly "salvage theater." Companies would dunk a bell for five minutes and return with some rusty nails just to keep the hype alive. They weren't mining the ocean floor; they were mining the pockets of people terrified of missing out.
Not a chance. The Crown never misses a miracle without taking a cut. King James II took a "Royal Tenth" right off the top, turning himself into the world's luckiest silent partner without ever getting his boots wet.
Phips was even knighted for his trouble. By turning a lucky scavenger into "Sir William," the government essentially gave the entire treasure-hunting craze a royal stamp of approval. It was the 17th-century version of a celebrity endorsement for a pyramid scheme.
This was the ultimate trap. Because the King got paid and Phips got a title, every regular Londoner assumed the system was rigged in their favor. In reality, the only thing "royal" about the following years was the scale of the losses.
