Tulip Mania: From Bulb to Bubble

Tulips are adored for many reasons: their vibrant colors, from classic red and yellow to more exotic hues including black; the simplicity of their single, elegant bloom atop a long, slender stem; the variety of shapes they come in, from the typical “goblet” to fringed or feathered petals.

But would you ever imagine a tulip could be worth more than a house?

According to history (some say legend), this happened in the Netherlands in the 17th century, during a period known as Tulip Mania.

Cultivation breeds competition

Despite their iconic association with the Netherlands, tulips didn’t originate there. Instead, it’s believed the first tulips grew as wildflowers in the Tien Shan mountains in Central Asia. By the 10th century, however, they were being cultivated in the Ottoman Empire — present-day Turkey, parts of southeast Europe, and Russia.

How, exactly, tulips came to Europe is open to debate, but most historians give credit to the Austrian ambassador to the Sultan of the Ottoman Empire, Oghier Ghislain de Busbecq. Apparently, sometime in the 1550s he sent tulip bulbs to Vienna, where court horticulturists began growing them in the imperial botanical gardens. 

It wasn’t until the 1590s, though, that tulips truly became a craze in the Netherlands. That’s when the director of the Lieden University Botanic Garden, a botanist named Carolus Clusius who would later be called the “father of the Dutch tulip industry," began planting tulip bulbs he’d gotten from his friend de Busberg.

Dutch horticulturists were almost immediately hooked. They quickly developed new techniques for breeding and propagating tulips.

Between their imagination and expertise, it wasn’t long before new varieties of the “exotic” flowers came on the market.

But because these new tulips weren’t exactly easy to cultivate, they were expensive and rare — which made them lures for wealthy collectors captivated by both the flower’s beauty and exclusivity. Considering tulips as yet another status symbol, they began competing for rare specimens, driving up the price even more.

Breaking the bank on broken tulips

As expertise in cultivation increased, the availability of tulips gradually grew, making them more accessible to a wider audience — and creating a situation where demand outstripped supply. 

Prices began to skyrocket, often doubling or tripling within weeks. Before long, it wasn’t just the upper class who wanted in on the tulip “game:” people from all walks of life, from the professional class to laborers, were caught up in the frenzy, investing heavily in the hope of striking it rich.

Tulip mania was in full force.

Vying for an existing tulip or bulb was one thing but soon speculators entered the fray. They began buying and selling contracts for future tulip bulbs, even though they didn’t own the bulbs themselves.

Prices went up and up, creating what’s known in economic terms as a “bubble.” The cost of a tulip was no longer based on the actual or intrinsic value of the flower itself, but on some price it might reach on some unforeseeable day. The emergence of futures contracts, financial instruments allowing people to buy and sell contracts for future delivery of bulbs and flowers without owning them, further fueled the fever.

This enabled speculative buying, where individuals purchased contracts for tulips, not because they wanted to plant or display the flowers in the moment but in hope of reselling them later at a higher price.

Perhaps most valuable were “broken” tulips." These had petals with two different colors in contrasting flame-like patterns. No one understood what caused the breaks; breeders were producing them by sheer luck alone.

By early 1637, a single bulb of the coveted "Semper Augustus" variety —a “broken” tulip with red and white breaks — could fetch over 10,000 guilders. That’s about what it cost to buy a house in Amsterdam at the time. 

The bubble bursts

Like all bubbles, Tulip Mania would burst, and not too long after it started, in fact.

By the end of 1637, demand for tulip bulbs had dried up and people who had bought contracts earlier at inflated prices were unable to find buyers.

The tulip market as a whole collapsed. 

And though there are stories of the crash causing widespread financial losses, some historians now believe that tales of bankruptcy and widespread economic suffering may have been overstated. Just about everyone agrees that any long-term impact was relatively limited.

There’s never been another Tulip Mania since.

Centuries later, the Netherlands remains the world’s tulip capital, producing more of the flowers than anywhere else. Now, however, no one is betting the house on them.