The crash was inevitable due to an unsustainable boom in stock prices.

But the TIMING of the crash is the most interesting thing about the 2000 dot com crash, and I very rarely see it attributed as described in the following analysis.

TL;DR: People think the Y2K event was a bust, a non-event, but actually it caused the Dot-com crash! (At least it caused it to occur when it did, in March/April 2000...) (Hear me out.)

And in theory, it should have all been forseeable. But nobody at least that I've heard of saw it coming.

First remember that in any gold rush (e.g. dot-com online riches) where it's hard to pick who the winners will be, an easy bet is the companies selling the shovels/infrastructure (in the dot-com case, servers, etc). You don't have to be smart enough to know where the gold is to get rich off the infrastructure "boom" and that was a common play for many investors of that era.

The late 90s was a huge time for UNIX companies who were not yet cannibalized by Linux and had larger server businesses. HP, IBM, DEC and most notably Sun Microsystems (whose development of Java added some marketing sizzle to their already leading UNIX server marketshare). And there were software players like Oracle also. Webservers and even more large database servers backing those webservers were a multi-billion dollar business. And the sizzle of that sexy internet business was used to sell more boring conventional backend database servers to companies who were increasingly getting on the UNIX/TCP-IP bandwagon in the 90s. The server companies made an attractive stock offering for brokers trying to pitch high-growth but still somewhat safe stocks to an unsuspecting clientele just looking to get in on the action. (The owner of the pizza shop near me was always quizzing me about tech stocks recommended by his broker. So the hype had gotten pretty high even on "Main Street". He suffered significant losses btw.)

However, in the first 2-3 months of 2000 all the hardware sales for all the big server players started to drop off a cliff, relatively speaking. (You'll see the dot-com crash often dated to occurring in late March, early April). With such a noticeable off-trend sales drop, the high PE multiples of Internet poster-children like Sun Microsystems, justified only by continued massive growth were suddenly not sustainable and contagion among these internet high-flyers suddenly came into sharp relief and question, spawning a panic/stampede ("who will be next"? "get out while you can!", etc).

Now why did the hardware sales start crashing? It turns out it wasn't the Dot-com Internet companies slowing their orders (at least not until their stocks started crashing too)... it was all the companies who had built up a huge secondary infrastructure of hardware+software for Y2K testing. To verify that production equipment would properly function when clocks rolled over from 12-31-99 to 1-1-00, many companies just bought small (or even fullsized production-grade) servers to duplicate their production gear and tested it would function properly by rolling the clocks forward in advance of the date and ensuring the software handled the transition.

With Jan 1st 2000 in the rearview mirror, many medium and large companies slowed their hardware server purchases for a year or so while they re-purposed their Y2K test servers for normal business use.

For Internet dot-com companies (even though they were a hardware play) like the flagship internet server company Sun Microsystems, this resulted in a significant drop in sales, and the awareness of this started hitting the market as those companies started to issue guidance about 1Q00 earnings.

As I said, once Sun and others started dropping, the Internet play itself was considered vulnerable and everything came back to earth.