The Wildest Financial Crazes in History

If you think that NFTs are bizarre, then wait until you hear these stories! Throughout history, people have used their life savings to go all-in on some really strange investments.

The news broke last week that Seth Green’s ape had been stolen. No, not a real primate. Green was hoodwinked by a phishing scam, and his NFT by Bored Ape Yacht Club, which the Robot Chicken mastermind had hoped to use as the star of a new animated show, ended up in the hands of another buyer.

The cryptocurrency and NFT markets seem like bubbles that might be about to burst, according to some analysts. Investors who sank thousands, if not millions, of dollars into JPGs of apes and zombies insist that the blockchain is the way of the future. Maybe they’re right—but history is full of similar financial crazes that eventually crashed.

The Mississippi Company

We all know that it’s a bad idea to get into so much debt that you can’t see a way to bail yourself out. In the early 18th century, however, France had to learn this lesson the hard way. Louis XIV, aka “The Sun King,” was an expensive monarch, and the country had also fought wars it couldn’t afford. The government had raised taxes as high as they could, but it still wasn’t enough to refill France’s coffers.

Enter John Law, a Scottish economist who had fled his homeland after a duel went bad. Law was an old friend of Louis XIV’s nephew, the Duke of Orleans, and when the king died a year after Law arrived, he was in a prime position to serve as a financial advisor to the new regent. Law’s big idea was to switch from using gold and silver coins to paper money. He convinced his friend to allow him to open a bank that accepted deposits of precious metal coins in exchange for paper currency, and it seemed to be going great… at first.

New Orleans house

Then Law got greedy. He knew that France owned a big chunk of territory in America, and he saw an opportunity to make himself even richer by taking control of the Mississippi Company. Soon, Law was in charge of all trade between the colonies and France—and scooping up profits with both hands. Investors believed that he had a golden touch, but since Law owned a bank that could literally print money, he got a little carried away selling shares in the Mississippi Company. Everybody—even the lower classes, who could ill afford to lose what little they had—wanted a piece of the pie. Soon the price of a single share ballooned by 2000%!

When those investors wanted their profits in gold, not paper, things started to fall apart. Inflation skyrocketed even as the value of shares in the Mississippi Company fell. Law ended up losing everything—and so did many of the people who invested in his scheme.  

Beanie Babies

Let’s look at a more recent financial craze. We all remember Beanie Babies, right? In the late 90s, people went absolutely nuts for these little guys. The cute stuffed animals were once one of the hottest commodities on the planet. And while you can still find the odd rare and valuable Beanie Baby, you can also find garbage bags full of rejects that aren’t worth even a fraction of their original retail price.

At the height of the craze, however, collectors were rabid to get their paws on the rarest—and therefore most valuable—plushes. Human beings tend to value things that are rare and beautiful. But while beauty is in the eye of the beholder, there was nothing truly rare about Beanie Babies. The materials used to mass-produce them in China were no different than any other stuffed animal. But founder Ty Warner realized that he could create an artificial sense of value by “retiring” older designs and replacing them with new limited editions.

Beanie Babies

Then things started to get out of hand. The original lineup of nine Beanie Babies became prized collectibles. The resale market went through the roof, and dedicated collectors were stalking Hallmark stores and McDonald’s drive-thrus to get the newest toys before anyone else. Some of the toys, such as the Princess Diana bear, were revered as future heirlooms. People reacted to Beanie Babies as if they were real-life Pokémon: gotta catch ‘em all.

Many folks didn’t just want to collect the toys, however; they wanted to invest in the future. That was the case for this young woman, whose mother bought into the craze wholeheartedly. Her mom bought and sold Beanies on eBay in the late 90s as well as scouring local stores for rare and valuable editions. For a while, it worked. According to Meg Conley, “Between 1994 and 1999 the annual rate of return on Beanie Baby investment was 170%.”

Unfortunately, the dream of retiring on Beanie Baby money couldn’t last forever. “The people who got into the Beanie Baby Bubble early did well. The ones that got in a little later, or held onto their Beanies too long, did not,” Conley writes. Her mother wasn’t one of the lucky ones. The bubble burst in 1999, and now the stuffed toys are being sold by the crate at auctions or given away for pennies at yard sales and thrift stores.

“The world experienced a sort of collective delusion around the worth of what is, essentially, a fabric sack of beans. In hindsight, bubbles rarely make sense,” Emily Stewart notes for Vox.


Roughly 350 years before Ty Warner dreamed up Beanie Babies, another craze swept the globe. For three years, from 1634 to 1637, tulip bulbs were literally worth their weight in gold. In fact, some of them were worth their weight in precious gems!

bouquet of tulips

At the time, the Dutch Republic was the biggest powerhouse in the world. They had a near-monopoly over the global shipping routes, and their artists and craftsman produced the finest goods in the Western world. The people of Holland enjoyed the highest per capita income during this time period, and maybe it went to their heads. For whatever reason, they became obsessed with tulip bulbs. Allegedly, people were trading acres of land for a single rare tulip bulb. Others would spend six to ten times the annual salary of a skilled craftsman to get their hands on one.

As speculation continued to drive up prices, people went all-in on the flower market. After all, if a tulip bulb that was worth 100 Florins last month was now selling for 500 Florins, then surely it would be worth $2500 next month! Well, that’s only true until the bubble bursts.

Why Does This Keep Happening?

Unlike John Law’s Mississippi Company, which functioned more like a modern-day Ponzi scheme, the tulip speculation craze has more in common with Beanie Babies or the housing bubble that led to the 2002 recession. In each of these cases, there comes a moment when the market simply can’t bear any more expansion.

Some investors might be able to cash out at the exact right time to line their pockets. However, many more will be left holding a bag of smelly old roots. The few that became millionaires—a term that was actually coined during John Law’s Mississippi bubble—will swear that they were just smarter investors. Unfortunately, those who failed to hit the sweet spot always lose everything. Why would people take that risk?

a Bored Ape
Bored Ape Yacht Club

In his 1841 book Extraordinary Popular Delusions and the Madness of Crowds, Charles MacKay argues that people are prone to getting swept away. The lure of wealth, combined with the excitement of being part of a so-called movement, can make even the smartest folks lose their heads. Nowadays, it’s even easier to get carried off by the latest financial craze thanks to social media and celebrity endorsement deals.  

It’d be nice to think that all it takes is one brave soul to point out the absurdity of investing so much money in something that clearly isn’t worth the price. However, people are more likely to hold onto their delusions until the bitter end. Only after they lose everything do they realize that the emperor had no clothes—and the tulips, beanie babies, shares of stock, or JPGs of monkeys have no value.

Tulipmania was arguably the first recorded financial bubble in history. We’ve seen quite a few more of those crazes since then—and I’m not convinced that NFTs are any different. Like the other speculative bubbles on this list, NFTs are only worth what someone will pay for them. They have no intrinsic value or purpose. While some advocates of cryptocurrency will claim that we’re only now beginning to understand the scope of what non-fungible tokens can offer the world, many NFTs have lost nearly all of their value.

At least you can still cuddle with a Beanie Baby.  

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