[ameister14]

Did you follow the archegos capital implosion? That's what happens on a smaller scale than tether. What you'll get is a price drop, a pretty significant one, because it will happen suddenly.

There is no foundation for the current prices of cryptocurrency, so if people get the impression that its propped up by frauds it runs the risk of dropping precipitously.

Also, I think you underestimate the follow-on effects of 20% of a market's daily trading volume pulled out of a market all at once.

[zilebune]

I've only followed Archegos from afar, but I see your point. Basically it all boils down to people's trust in Tether, which if lost could cause a ripple effect and massive dump of USDT.

I think there are just too many unknowns to predict the market-wide impact, but Archegos is a good case study (in a way so is Ripple/XRP who went through a somewhat similar dump for different reasons a few weeks ago).