We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Tulip Craze?

By Brendan McGuigan
Updated May 23, 2024
Our promise to you
Historical Index is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At Historical Index, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

The tulip craze was a historical event in the Netherlands that is often held up as a prime example of the dangers of market speculation. The term tulip craze is often used to refer to a market bubble. Although there is some contention in modern thought about whether the historical tulip craze was actually as drastically influenced by speculation as was previously thought, the event still serves as a good allegorical example of the pitfalls of rampant market speculation.

A tulip craze basically occurs when there is an increase in the value of something, and a number of speculators invest heavily to take advantage of that increase — this speculation then causes a further, often more rapid, increase, which encourages further speculation. This sort of speculative increase cannot, of course, continue forever, and once the value levels out or begins to drop, a massive drop typically results. This phenomenon is also often discussed in terms of a bubble inflating and eventually popping.

The historical tulip craze occurred in the Netherlands on the early side of the 17th century. Tulips had recently become very vogue, especially among the wealthy inhabitants of the Netherlands, and as a result, rare varieties began to reach rather exorbitant values. Eventually, some tulips were sold at the rate of a single bulb for the value of a house, and lots of bulbs were exchanged for large estates. Tulips became a commodity on the Dutch stock exchanges, allowing people who weren’t cultivators or traders to try to take advantage of this boom.

As a result, many people began putting enormous amounts of wealth into speculation on the tulip market — in some cases, their entire savings or properties. This speculation reached a fevered pitch — hence the term tulip craze — around 1636, with more and more money pouring into the market, including speculation on tulip futures offered by traders who had not yet planted bulbs. In early 1637, the market was saturated, and some traders began to sell, often in large amounts. As others saw that the market was turning, they panicked and unloaded all of their tulip stock, causing an enormous downturn.

The tulip craze ruined many thousands of people financially, as tulip bulbs that had been purchased for the price of a great estate were nearly overnight devalued to the price of common onions. There were trading events similar to the great Dutch tulip craze in other parts of Europe as well, with tulips reaching exorbitant prices, subsequent speculation, and an eventual bubble burst, but none nearly as catastrophic as the Dutch tulip craze of 1636-37. In the modern age, there are many examples of economic events similar to the tulip craze. Real-estate speculation, for example, can often reach similar levels, with land speculators paying extraordinary amounts of money for properties in what are thought to be highly-desirable locations, only to eventually have the market turn and be left with greatly devalued property.

Many items of popular culture follow the same trajectory as the tulip craze, although on a smaller scale. Baseball cards, for example, went through a period in which they could fetch great sums — mostly due to speculation on the part of people who saw the potential for great profit — and ultimately crashed such that cards once worth thousands of dollars became worth little more than the paper they were printed on. Beanie babies, Elmo dolls, pogs, and innumerable other children’s toys and collectibles also serve as recent examples of modern tulip crazes.

Historical Index is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By TryMyBest89 — On Dec 17, 2014

Is there an example in the West of a current "tulip craze?" I'm familiar with the fads the author cited in the article, but I'm drawing a blank when trying to think of even a single current example. Any ideas?

Historical Index, in your inbox

Our latest articles, guides, and more, delivered daily.

Historical Index, in your inbox

Our latest articles, guides, and more, delivered daily.