Bitcoin holders.
I hold BTC but didn't use USDT in the process, just deposited normal fiat and bought BTC using that.
2. USDT holder purchases BTC with it
3. Bitfinex purchases crypto (mostly BTC) with the USD, instead of holding it as promised
Thus the original USD of the person buying BTC at the exchange has effectively double the buying pressure on the BTC market because Bitfinex is actively investing all their USD holdings that "back" Tether into the market as well.
Bitfinex originally denied relation to Tether but it's been proven that was a lie.
The worry is, at some point there could be a "run" on Tether, when the curtains are pulled back, where all the USDT-BTC traders who happen to have USDT holdings and they suddenly become worthless because nobody wants to trade USDT-BTC anymore at 1-1.
As long as "public confidence" in USDT continues, the charade will too
It's hard to analyze Tether/Bitfinex's risks here because, well, they have been fairly opaque about what their actual financial situation is, so people are relying on their gut instincts to guess what it is.
The market cap for BTC is $1000bn. Wouldn't they easily be able to unload the position over a 1-3 month period without too much price impact? They own 1 percent of the market cap, and in the stock market we often see larget stockholders than this unload their whole position without a catastrophic impact.