The "government" didn't do much at all, there was no real oversight or guarantee like there is today. The whole concept was novel at the time so there was no law and there were no real procedures. The Dutch Republic may not have had an official king, it also sure wasn't a democracy with real, independent institutions or anything like that. The country was led by a democracy-lite system of nobility/rich people that feels a lot like how early American voting worked (but divided even less evenly).

The closest thing to an involved government wasn't really in favour of trading in immaterial goods at all. Something close to government intervention did happen in one of the two involved government systems after the bubble popped, but it was effectively unratified and useless (the local equivalent of a supreme court even ruled that the government couldn't interfere with the tulip trade).

The entire thing was just a club of a few hundred relatively rich people throwing themselves at a bubble. Most people didn't have the means or money to participate.

The "mania" name is an insult to those who partook as much as it described the trade bubble. It's not related to the modern psychological definition of "mania" that came much later.

Does it make sense to talk about "the government" in this age? It probably misguides us more than informs us. I've always felt the perception of government at the time is closer to our perception of the captain of the local football team - at best distant and upholding the honor of the village, at worst a thief with a title - rather than how we view it today. Authority of information lay with the church. Maybe replace by "Persons of wealth in positions of power"?

>It should be a story about governments misallocating resources. That's it, but people quit. Keep twisting it into a story of psychology and mania which it was not.

The fact that it's marketed as a story about psychology and mania rather than government policy gone awry is arguably itself a story about psychology and mania.

People have a need to feel like the forces that control them know what they're doing.

That's some similarities to the Salem Witch Trials. They were largely about going after whoever had a vendetta and pull with the courts and the bewitchery was the plausible mechanism under which that happens. The 'mania' was largely a veneer under which hid raw projection of judicial-political power to rid political and personal undesirables.

From the article in the comment above, it seems like lack of government involvement is a factor. The article says the courts were unwilling to settle purchase contract disputes. Sounds like a government that is not performing what we today consider a core function, or even libertarians tend to agree civil court is an important function.

> It should be a story about governments misallocating resources. That's it,

No. It’s a story that has been repeated with beanie babies, baseball cards, and crypto crap

Exact same argument for crypto though. It is all just supply demand. BTC has much more demand currently and likely more sustainably. Alt coins are just less popular. It is all just supply vs demand.

Using your reasoning a large number of collectible items should be worthless. What really makes an NFT different from a Pokemon card, a Birkin bag, or even an original Monet? My guess is that the seller has to have some sort of authority and established reputation for these kinds of artificially scarce luxury goods to maintain value.

No different than the us dollar, except for the fact that the dollar is backed by armed forces, which is paid by us dollars....

>> All you “own” is an entry on some ledger, which doesn’t inherently give you ownership over anything else.

No different from bitcoin...

I'm not really convinced that people thought there was "anything else", it's just that people thought that the entry on the ledger was going to increase in value, even from some of the stupifying initial values.

I own several NFTs that are important to me, and they're worth every penny I paid. I never had any illusions that I owned anything other than a historical footnote; I think that this sort of ownership is meaningful and important.

It's much more realistic to me than "buying a song" from one of the corporate music distributors. "Owning" a song seems to be much more of a misunderstanding of how data works in a digital world than owning an entry in a ledger.

I could be wrong but Id expect eth and nfts to have similar fluctuations, so this wouldn’t be surprising at all. What about compared to USD or another investment like spy

I'm all for shitting on hyperscalers, but let's not compare LLMs to tulips/NFTs.

South sea bubble covers those.

Labubu was last year:

https://www.cnn.com/2025/06/21/us/labubu-doll-plushie-pop-ma...

https://nypost.com/2025/08/02/us-news/this-is-the-most-expen...

It burnt out much faster than Beanie Babies did.

NFTs

As (probably) the world's largest reseller of Beanies at the time, this was 100% nothing to do with a Chinese supply crunch, as far as I was ever aware.

It was 100% to do with Ty corp's very clever handling of distribution, limiting where, who and how many Beanies could be sold.

There was a huge over-supply of the less rare Beanies and a huge under-production of the rarer ones. All done on purpose.

The Hunt Brothers (re)learned this with silver in the 70's. (80's?)

What's the pyramid scheme here? The Netherlands are the top producers of tulips today, seems like a sustainable business. A temporary inefficiency in markets does not make a pyramid scheme.

The article suggests people genuinely believed a tulip was, implicitly for the foreseeable future, worth more than e.g. a house. That suggests it was some sort of mania over rationality.

The NFT thing is comparable. I think most of everybody investing understood that they were worthless and that it was a bubble, but there was a remote chance that it wasn't a bubble and even if it was a bubble then you'd still a reasonable chance of making a profit, and even if you didn't make a profit then you'd stand an even more reasonable chance of getting out with fairly minimal losses. Nobody thought there was any remotely high chance of a poor quality rendering of an ape being worth more than a house for the indefinite future. It was just speculation, sometimes poorly and sometimes reasonably measured.

Many such prominent examples such as Thinking Machines, SSI and AMI Labs and many others like them.

Of course, the only reason for this 'valuation' is because of the founding team but that is just not enough.

This is still a crystal clear bubble.

- You can send any amount of money to anyone in the world very quickly and cheaply, and nobody can stop you.

- No government can dilute it or limit its supply.

Stuff like that. Maybe that matters to you, maybe not, but BTC was created because that didn't exist. And even if you don't use it, you're living in a world where financial institutions have to live alongside an alternative that does these things, for whatever that's worth.

Convert it to drugs. With the right combination, you can talk to Mr. Bitcoin.