The entire market cap of Tether is a small fraction of the daily volume of BTC. If 100% of Tether was traded for BTC, it would just be a blip on a single day's pricing.
Daily transactional BTC value has been in the billions for months, even before the recent price explosion. Yesterday's was a [very] record breaking value pushing $6 billion. The total market cap of Tether is less than $0.9 billion. That would've been about a single day's volume back in July. And to clarify, we're talking about if 100% of every single Tether is being used to purchase BTC with these numbers. That assumption is not correct meaning the actual impact is likely substantially lower.
That's absolutely true but what you cannot tell is how much actual liquidity exists. I was playing around with algorithmic trading this summer and would routinely have days where my personal transactional volume would exceed $500k and I was only playing with $2.5k. Just a lot of very short duration (sometimes holding for mere seconds) trades and I always took the maker side to avoid paying any fees.
They list the 24h volume for Bitcoin at $24 billion. At 9% or 10% of the 24h volume, Tether could very possibly be a major factor in the bitcoin price spike.