[blihp]

The problem is that 'unless there is a massive run' is nearly assured over a long enough time horizon. The fact that the major players know that they are reasonably safe unless there's a run is the thing that will cause a run in a panic. Also, if some well-capitalized hedge fund figures out how to attack it, they might also light the match on a run if there's money to be made in killing it.

[glerk]

These are very good points - in the long run the probability of a massive run is 100%, and the risks of it happening sooner rather than later are higher because of the incentive of attacking the peg intentionally. This can be said about a lot of financial products.

I think that at this point, these risks are priced in by the market (Tether is selling at a discount from USDC). If you disagree with the market, it is your speculation, and also an opportunity to get rich if you are right. For example, the FTX exchange offers Tether put options as well as the ability of shorting Tether, and there are many other similar products.