There is some beautiful irony in the fact that bitcoin got started partly as a protest against the banking crisis of 2008, which was due to falling real estate prices causing a wave of defaults spreading through the financial system.

Now, 13 years later, falling real estate prices may cause a wave of defaults spreading through the crypto-financial system. The wheel of time turns...

Citation needed. They say they don't hold Evergrande paper. Is that true? Who knows. But we actually don't know who's paper Tether holds.

This a game of telephone where you seem to be giving a 5th hand version of the initial news.

There was a lot of speculation that because tether is holding a lot of commercial paper they would have some exposure to Evergrande. No one ever proved that amount. Tether claims the exposure is 0. There is no particular reason that tether would have a large portion of it's portfolio in the paper of a single company.

So when you say "a large amount of Tether's backing assets" that statement is not only baseless but is just unlikely to be true.

Tether denies: https://thedeepdive.ca/tether-denies-holding-commercial-pape.... But that said, who knows? Tether isn't exactly reputable. Could still be affected by contagion in general Chinese paper.

Any source?

It seems tether is denying it ( but I don't believe them much though, i just want a trust worthy source. Ugh )

actually, it's going to make Bitcoin go to the Moon because Tether is shorting Evergrande paper!

Both the above and your statement have the same level of evidence behind them. We don't know what Tether's balance sheet is, and we don't know how that affects Bitcoin.

Should be noted that Tether have publicly denied holding any Evergrande paper.

i'd say they're more likely to hold no paper than Evergrande paper