A company tied to government debt
Founded in 1711, the company received trading privileges and a role in managing British public debt. Creditors could swap debt claims for shares. The scheme changed the state's financing while giving the company income linked to public payments.
Much of the excitement came from imagined riches in trade with Spanish South America. Actual access was constrained by war, diplomacy and Spanish rules. The share price could still rise on expectations rather than current profits.
Credit accelerated the rise and fall
In 1720 the company proposed converting more government debt. Its shares surged, purchases were financed with credit, and many dubious stock ventures appeared. Leverage means using borrowed money: it magnifies gains, but also losses and forced selling.
When confidence turned, buyers vanished and indebted holders had to sell. Parliament investigated conflicts of interest and the liabilities had to be reorganised. Institutions, lending and political power mattered alongside crowd psychology.
Why Bitcoin is a different claim
A share is ownership in a company and may carry a claim on future profit. Public debt is a claim on a government. Bitcoin is neither: it offers no equity interest and no contractual interest payment.
Price enthusiasm, marketing and leverage can occur in both markets. The legal and economic objects remain different. A buyer should ask what claim is being purchased, where any return could come from, and what happens when financing disappears.