Note that interest rates on USDT went down now and now it costs around only 3 % APR to short it. I've been short for a year now and will be fairly rich if Tether burns to the ground.
I'm not that sure. At least not in the short term. When people exit tether they'll mostly exit into other cryptos and this will generate demand vastly exceeding the supply.
In that scenario, I agree that the price of other cryptos in Tether will go up, if Tether seems like it's actively collapsing. However, that'd be due to Tether's perceived value being significantly less than 1 normal US dollar, or 1 of another US dollar stablecoin.
BTC per Tether goes up, BTC per anything else is unchanged, without considering the loss due to yet another crypto blowup.
I wouldn't be so sure. Demand is denand, doesn't matter if it comes from $ or USDT. Exodus from tether will reduce supply for everybody that wants to buy other crypto even if they pay in hard currency.
Of course this could be offset by reduced interest in buying crypto from everyone else because tether is folding. Only time will tell hiw it plays out.
If I were to bet I think I'd bet on cryptos falling then. But I can't be sure.