In short: the prices of the tulip bulbs grew extremely rapidly to heights that were only possible because of price speculation. Especially the Semper August tulip bulb, a flower that was red and white coloured, was popular. But in 1637, a stock market crash caused a crisis in prices which made a lot of people lose their invested money.
This whole financial bubble started with a tulip craze that led up to a lot of speculation and ended with a tulip crash. This happened in the 17th century, the Golden Age, in the provinces that are now part of the European country the Netherlands. Tulip bulbs, the source of which the tulip flowers grow, were the talk of the town in the 1600’s.
But in 1637, a stock market crash caused a crisis in prices which made a lot of people lose their invested money. This tulip stock market crash is comparable to the economical crisis we sometimes see at Wall Street and even with the Bitcoin crypto market crashes. How did the tulip fever start?
The flower originated in the former Ottoman Empire in the Middle-East. In the 16th century, it was introduced by trade in Europe. And it didn’t take long for the tulip craze to begin. It became an important part of economics and trade at already the end of that 16th century. At that point, the flower was rare in western Europe.
This whole financial bubble started with a tulip craze that led up to a lot of speculation and ended with a tulip crash. This happened in the 17th century, the Golden Age, in the provinces that are now part of the European country the Netherlands.
But now, in the 16-17th century, people would already pay high prices for tulip bulbs of which they never saw the flower it produces. So it was a bit of a gamble. Also the traders were speculating. They sold tulip bulbs without having them in stock. And of course, there were also collectors who put in a bid without not having the money at that time. People also put in a bid for a tulip bulb, to already sell it for a higher price to the next interested person. This chain of events caused a lot of people to put a lot of their money in the tulip trade. But it was a fragile bulb that would cause a lot of people to lose their savings.
Tulip bulbs, the source of which the tulip flowers grow, were the talk of the town in the 1600’s. Particular in the provinces of Holland and Utrecht. Even now, the flower is still the symbol of the Netherlands. In short: the prices of the tulip bulbs grew extremely rapidly to heights that were only possible because of price speculation. Especially the Semper August tulip bulb, a flower that was red and white coloured, was popular. But in 1637, a stock market crash caused a crisis in prices which made a lot of people lose their invested money.
So the trade in tulip bulbs grew. The flower became very popular. The variations of the tulip flower became collector’s items for which collectors, and everybody who could afford it, would pay big money. You can speak of a real tulip fever and people were so eager to have the flowers you can even call it a tulip mania.
At the start of the 17th century, the price of a tulip bulb could go up to 1.000 Gulden, the Dutch currency in those times. An average yearly income was 150 Gulden, so it’s clear that the tulip mania was growing to its peak.
The most known example of the tulip mania was the tulip variation called the Semper Augustus tulip , a red and white variant depicted in the picture beneath. A buyer once paid the price of 6.000 Gulden. This was in the 17th century the price of a very nice house in Amsterdam!
But in 1637, a stock market crash caused a crisis in prices which made a lot of people lose their invested money. This tulip stock market crash is comparable to the economical crisis we sometimes see at Wall Street and even with the Bitcoin crypto market crashes.