https://anchor.fm/aviv-milner/episodes/The-Tether-Situation-... at 30:57
* Price of BTC/USDT ETH/USDT explodes as people try to exchange Tether to another liquid asset
* BTC and ETH start to drop on non-Tether exchanges as people sell and try to get out to fiat currency
* Tether collateralises futures contracts, when BTC/USDT spikes, some strange behaviour may happen in derivatives based on Tether.
* Tether allegedly is a meaningful percentage of the commercial paper market, if those assets are seized, it may affect that market.
* Some S&P500 companies have a lot of Tesla on their books. As BTC/USD drops, that would impact their stock price, and potentially the index overall.
* Some shadier crypto exchanges may go under or abscond with client funds in the confusion.
A lot of this could happen in a matter of minutes.
You could imagine a similar flight to safety happen if Tether was revealed to not have the reserves they claimed to and were unable to redeem client funds.
Fun times!