On the pump phase, everything could work, even if it's not sustainable and even if everybody suspects that is not sustainable.
I'm old enough to have lived the .com bubble as an adult, and almost everybody knew/suspected it was a bubble, and that 95% of the business would fall at some point in the near future. But if you believed that it would last at least one more year, and you can squeeze a 20% profit, and you can do it leveraged 10x... it's just too tempting to many.
Fast forward 7 or so years, housing bubble, same tune: it was a main talking point, everybody knew it was a bubble and unsustainable, but very few predicted the burst to 2007 (and even the ones who did were the same that predicted it to 2004, 2005 and 2006). You are in 2004, everybody saying "this is a bubble" and waiting. In 2005 people still waiting looked like losers, while 2004 buyers laughed and I-told-you.
Nobody wants to be a loser, and some people should beat the market or get fired. Only way to beat the market? Ride the bubble. And the rational way to ride a known bubble is leveraged: you enter the market, profit heavily, and ideally exit (it almost never works). You know you cannot ride a bubble expecting it to rise forever, you know it's going to crash, so you need to enter and exit ASAP.