The issue is that Tether makes up not just a significant portion of but almost all of the trading volume of the entire cryptocurrency market. If something happens and Tether goes tits up the entire market goes with it since effectively all of the volume on nearly every exchange (excluding a few US exchanges) is done in USDT trading pairs.

Eventually the market will sort itself out but that initial bloodbath could cause serious financial issues and the recovery could take years.

https://crypto-anonymous-2021.medium.com/the-bit-short-insid...