Money pouring into tech and internet company start-ups by venture capitalists and other investors was one of the major causes of the dotcom bubble. ... It coupled with fewer barriers to acquiring funding for internet companies led to massive investment in the sector, which expanded the bubble even further.

What causes a bubble to burst?

Historically, the most frequent catalyst of a bubble-bursting is rising inflation and interest rates. Bubbles, and related exuberance, encourage large amounts of borrowing and margin investing, both of which can cause pain when rates rise.

How quickly did the dot-com bubble burst?

The pre-bubble period of the Dotcom bubble went from 1995 to 1997, the actual bubble took place from 1998 until March 2000 and the bubble-burst from March 2000 until the low-point of the NASDAQ score in October 2002 (see figure 1). After that period, the stock exchanges slowly recovered.