Peak prices
At the top of the market, contracts on rare tulip bulbs traded at ten times an Amsterdam craftsman's annual wage. A single Semper Augustus bulb, prized for its red and white striping caused by a mosaic virus, reportedly sold for more than a three-story canal house. Most trades were futures on bulbs still buried in the ground, contracts on contracts, the first derivatives bubble in recorded history. Buyers rarely intended to take delivery. They planned to resell the paper.
The 'tulip mania' as popularly remembered was concentrated in a small class of Dutch speculators over a few months. The collapse did not destroy the Dutch economy. It did destroy the assumption that speculation in a useless asset could sustain itself forever — an assumption that has been rediscovered, and re-destroyed, many times since.
01 · Tulip Mania
Dutch tulip bulbs — specifically, the ones infected with a mosaic virus that produced striped 'broken' blooms — became the speculative asset of the 1630s. At the peak, a single Semper Augustus bulb traded for more than a luxurious Amsterdam canal house. Then, one February morning in 1637, a Haarlem auction failed. Prices collapsed 99% inside three months.
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