A token only redeemable for bitcoin collapses and you think that will hurt the price of bitcoin? It will hurt the price of tether certainly, the other side of the trade will boom.
Always amazed that some fail to grasp this, tether disintegrating is a solid buy for bitcoin, apart from the bad media coverage, which going by current standards has no effect on price. So that's $600m desperately trying to get into bitcoin all at once, this likely happening within a space of ~72 hours, think about it for a moment.
It's not a zero-sum game: value can and will be created and destroyed. If a crash of tether causes a distrust in the whole crypto space (which is not a given at all, granted), and people rush out of the whole space, all of it will crash.
Would a crash of tether be a source of concern for the value of Bitcoin? If bitfinexed hypothesis is correct, that is to say that Tether is printed out of thin air and used to buy Bitcoin thus artificially inflating its value, then yes, absolutely: a crash of Tether would cause massive distrust in the entire crypto space...
in such a scenario, tether collapsing in value, the demand for Bitcoin (or other coins) would be from those who held the collapsed token. So the price of Bitcoin in tethers might skyrocket, but since the one to one peg to the US Dollar will be broken, I don't see why the effect of the dollar price of Bitcoin would rise? Maybe if even those who held actual dollars on the very few exchanges who allow them panicked as well, it might. The overall panic could cause the bitcoin price to go down too. A lot of uncertaint mass psychology at play here.
Always amazed that some fail to grasp this, tether disintegrating is a solid buy for bitcoin, apart from the bad media coverage, which going by current standards has no effect on price. So that's $600m desperately trying to get into bitcoin all at once, this likely happening within a space of ~72 hours, think about it for a moment.