I guess that, by now, everyone has heard the rumour about tether artificially inflating the price of cryptocurrencies.
Nothing new here. I'm also thinking that the temptation to use/invest what you got in exchange for all that tether(2.5B$) is too strong to overcome.
This is all speculation and we would probably not find out the truth very soon.
However, what I want to understand is in a different direction.
Suppose you're Bitfinex and you've convinced the others to use/adopt this "superuseful" new token. You start to spread it all over the place, convincing people to use it and in exchange you receive 2.5B$ worth of BTC, altcoins and FIAT.
On the opposite side of the table, as a client, you have some crypto and you try to speculate some opportunity, and you sell it for USDT(since most of the exchanges only allow crypto - USDT trading, and not FIAT), then, at some point, I guess you have to sell your USDT back for crypto, since you can't use USDT in the real world as FIAT or BTC, nor you can wait for it to rise(it is supposedly pegged 1:1 with USD).
First question that begs to be asked, why would you want to mid/long-term hold USDT instead of BTC or FIAT?
Second question, who would want to hold 2.5B USDT? Where is 2.5B USDT stored right now?
I cannot imagine that there is a 2.5B$ mass of people thinking that BTC or alts are going down, and decides to hold USDT for months or years, waiting for the market to recover. You want to hold FIAT instead, in this scenario.
2.5B USDT is huge, it is 30-40% of the whole FIAT money that would be needed to create a 300B$ marketcap.
According to JP Morgan, roughly 6B FIAT $ were invested in the crypto world, in order to create a 300B$ marketcap:
http://jamescrypto.com/the-difference-between-inflow-and-market-cap-and-how-it-relates-to-tethers/So, who is holding 2.5B USDT tokens and what do the masses do with USDT(other than short-term[1-2 days] transfer of value)?