The Dutch tulip bulb market bubble (or tulip mania) was a period in the Dutch Golden Age during which contract prices for some of the tulip bulbs reached extraordinarily high levels and then dramatically collapsed in February 1637.
[1] Tulip mania ( Dutch: tulpenmanie) was a period during the Dutch Golden Age when contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels, with the major acceleration starting in 1634 and then dramatically collapsing in February 1637.
Was tulip mania really the first great financial bubble?
One frosty winter morning, at the start of 1637, a sailor presented himself at the counting house of a wealthy Dutch merchant and was offered a hearty breakfast of fine red herring. The sailor noticed an onion – or so he thought – lying on the counter.
How did the Tulip bubble start and end?
The Tulip Bubble started ballooning when selling prices for certain bulbs hit exceptionally high rates. At the height of the tulip craze, individual bulbs were said to have sold for more than ten times the annual salary of a skilled artisan at that time. This price surge ramped up in 1634, then collapsed in February 1637.
How much did Tulips cost during the Tulip bubble?
At the height of the bubble, tulips sold for approximately 10,000 guilders, equal to the value of a mansion on the Amsterdam Grand Canal. Tulips were introduced to Holland in 1593 with the bubble occurring primarily from 1634 to 1637.
What happened to the tulip market in 1637?
So, as a bet on the price of bulbs on the settlement date, this market was not different in function from currently operating futures markets. The crash of tulip prices in 1637 left the growers of the bulbs to absorb the majority of the financial damage of the mania.
What happened to the Tulipmania?
At the height of the market, the rarest tulip bulbs traded for as much as six times the average person’s annual salary. Today, the tulipmania serves as a parable for the pitfalls that excessive greed and speculation can lead to. The Dutch Tulip Bulb Market Bubble was one of the most famous asset bubbles and crashes of all time.
Today, the tulipmania serves as a parable for the pitfalls that excessive greed and speculation can lead to. The Dutch Tulip Bulb Market Bubble was one of the most famous asset bubbles and crashes of all time.