The more usdt are being issued and the more bitfinex liabilities (as finex usd running in bitfinex exchange) then the more the total marketcap of all cryptos arises.
The problem is that usdt(tether) is not redeemable directly for real usd. This can be seen from the total supply of usdt. If usdt was directly redeemable for usd there would be random decreases in usdt supply. Instead there is only an exponential increase of usdt supply.
https://coinmarketcap.com/currencies/tether/So when someone has usdt and wants to withdraw real usd, he has to buy first some cryptocurrencies and then he must exchange the cryptocurrencies for usd in a crypto <=> fiat exchange and afterwards to withdraw the usd to his bank account. So real usd exits the system but usdt is being kept into the cryptomarket giving it a faulty inflated total market cap. You can compare it with some countries with hyperinflation which causes the prices of goods to skyrocket.
What is the real total marketcap of all cryptocoins?
A rough estimation would be bellow.
Lets say:
T= total usdt issued (Tether)
F=total finex fiat liabilities
U= total real fiat kept in crypto<=>fiat exchanges like bitstamp, gdax, gemini ,ect.. and supports the prices with bids in the orderbooks
If A= U / (U + F +T) , A=(total fiat) / (total fiat +issued usdt + total finex liabilities)
Then the
REAL market cap of all cryptocoins should be A x current total market cap = A x 250B $ at the moment
Taking into consideration the fiat sitting in the orderbooks of fiat to crypto exchanges (assuming that are legit exchanges) a rough estimation would be:
U =400M
F= lets say 300M (total finexUSD in the accounts of finex users)
T=640M
=>
A=0.3
In conclusion
REAL combined total market cap of all cryptos should be A x 250B$ = 0.3 x250 =75B$
For example if tomorrow the supply of a fiat currency doubles in a country then we expect the prices of goods to double as well.
The biggest risk right now is taken by usdt holders, long term investors and bitfinex users
