[NovemberWhiskey]

If Tether is fully collateralized, then if you sell Tether below 1, the buyer can redeem it for $1 and make an arbitrage profit.

The usual expectation is that arbitrage opportunities vanish as the rush of risk-free profit takers closes the price gap. As such, it doesn't matter what other participants are in the market; the arbitrage buyer is always going to be the best bid below 1.

You might see temporary breaks from the arbitrage-free price due to liquidity (e.g. in a thin market, there might not be enough buyers initially).

If you keep selling, you'll eventually get to a situation where no Tether are in circulation, but every last Tether will sell for ~1.

How do you get the idea that leverage matters here?