Tulip Mania
That famed Dutch bubble of the 1630s has implications for today’s markets.
July 31, 2025
As the markets overflow with traders shifting their assets from dollars to rare metals to Japanese yen and back again—currency markets are seeing record trade volume—traders would do well to recall tulip mania.
Tulips appeared in Amsterdam in the late 1500s, and by the 1630s ended up commanding fantastic sums—nearly the price of a modest house for a single bulb, according to some accounts. Expensive tulips “served as status makers in Dutch society, just as owning certain NFTs today signals membership in certain digital communities,” says Adam Hayes, an economic sociologist at the Hebrew University of Jerusalem. Indeed, Dutch social clubs facilitated trading and boosted hype.
What ensued became among the most famous speculative bubbles in history. In this case, speculators had been buying bulbs year-round, spending large sums of money for no immediately tangible asset. (Sound familiar?) The bulb market crashed one February; this is relevant because months later, when bulbs became available again, many buyers refused to pay, leaving tulip sellers furious and empty-handed. The tulip market became an immediate laughingstock. “Even then, people thought it was crazy to spend that much on a bulb,” says 17th-century historian Anne Goldgar, chair of European history at USC Dornsife College of Letters, Arts and Sciences.
Tulip mania is now a mainstay of economics textbooks and documentaries, and the topic of a lengthy, surprisingly active Wikipedia page. The storyline is not just an historical anecdote, but a “cultural script,” says Hayes. “It’s a narrative template that we use to make sense of similar-looking phenomena,” he says. People commonly reference tulip mania as shorthand for bubble-prone markets like cryptocurrency or blockchain or NFTs, though economists bristle at this,given that the bulb market (small, simple) has little in common with crypto (global, innovative).
But there may be a problem with the popular tale of tulip mania. “In fact, not that many bulbs were expensive, and not many people were involved,” says Goldgar, who wrote her own detailed history of the era, Tulipmania. She counted far fewer buyers, at price levels far lower. Yes, in her view, tulip mania happened, but only to a small group of investors. “An economic-historian friend tells me that I’m never going to change people’s minds about it,” says Goldgar, “because it’s too good a story.” Either way, the investing lesson here is timeless: Stay out of intangible markets that you don’t understand.
Photo credits: Jacob Marrel; Artpartner-Images/Getty Images
