Price in which terms? USD? USDT?
Suppose it turns out tether is a fraud. What will happen? Tether holders will try to sell it for USD or Bitcoin. High supply of tether will lead to higher BTC/USDT and higher USD/USDT rate. Those who managed to convert tether to BTC will likely try to convert BTC into USD. This will lead to relative over-supply of BTC versus USD and BTC/USD will decrease.
So you find an exchange that will allow you to short the BTC/USD (not USDT) pair and take a position. The liquidation price of your short is known to the exchange operators. If your position is large enough to create a problem for the whole scheme, the exchange owners can inform the Tether printers of your liquidation price, which they can use to squeeze you out, because they know exactly how high the price has to be to trigger your margin call.
If USDT:USD collapses, BTC:USDT will naturally go up, but it's also quite likely that BTC:USD (whether direct or indirect) will go down, to the extent it has been inflated by artificially inflated USDT:USD.
Genuinely curious about how could I do that. I am not that much into cryptocurrencies, so I appreciate if you have the time and will to be specific in the operationals. I do have a (currently empty) account at Kraken, if that helps.
How can I short BTC?
Assuming you have enough collateral, you currently even get paid money to hold a short.
As to your general point, I'd avoid holding the view that a 7 or so years old business can't fail as any kind of general truth. I know many smart people who are extremely bullish on cryptocurrencies, with huge investments. None of them think Tether will not fail one day. Everyone is playing the current market as a bubble.
If market craters and the counter party to your short disappears, where are you going? The SEC? Finra?
Honestly, you really have no idea.....
I shorted tether one time, on Kraken, and it was horrendously expensive, like 25% per annum. Do you know where it can be done cheaply?
Slightly positive predicted funding at the moment, which means you would get paid for shorting.
Have you actually sat down and thought about this, even if 99% waited and cashed out over weeks, that 1% is still a huge injection into the ecosystem.
People have been shown time and time again that the money is there, the peg can hold, the underlying company is also a cryptoexchange that can print cash simply by existing and all haters have left is attaching their ego to this notion and clinging to the dream of it going bankrupt over night. And the more they are wrong the more they desperately cling to this idea.
Tether had $1B stolen from them when it was a significant % of their assets, along with the US govt taking other funds in the NYAG case and they easily survived, if not thrived.
These comments/stories on HN have been here for years and they don't age well, it's hilarious to watch.
You can all go short tether or bitcoin today for a fraction of a penny on the dollar, and yet, don't :/
Why not do it, you can hold a bitcoin future going short for the next year less than a coffee per / $1k, why not do that? Would surely make a great story.