I know you said you don't know what will happen when Tether collapses however I would like your opinion of the following scenarios and how you would rank them in terms of probability. I'm going to focus the options around Bitcoin.

a. Bitcoin remains stable as $2 billion has evaporated from the ecosystem which results in much lower liquidity, this results in a trading halt as no one selling Bitcoin on the USDT exchanges (which is most the volume). Essentially no major change to the crypto market.

b. Bitcoin prices go up due to high buy pressure as more people will try to unload their Tether bags they will drive the price of Bitcoin upward, once Tether crashes Bitcoin could be trading at 100k+ USDT. This could create a new floor/support for Bitcoin well above the ATH. I don't really see why there would be reason to sell Bitcoin if Tether crashed, I would personally just hold my Bitcoin. This would also mean this has achieved the ultimate goal of Tether/Finex (as speculated by Bitfinex'ed), artificially inflating the price of Bitcoin.

c. Bitcoin crashes with tether as Bitfinex will likely go down with Tether, causing massive FUD within the market with Mt Gox 2.0. People panic sell in the Fiat exchanges causing the "Bubble Pop" as they feel the price of Bitcoin was artificially inflated. This is obviously the most un-ideal situation.

There are endless variations to the above scenarios. Would like to hear opinions from the other readers too.

My ranking would be
b. BTC increases - 50%
c. Bubble Pops - 40%
a. Nothing really happens - 10%

Bonus question. As you mentioned many exchanges have USDT pairs to bypass regulation, if Tether was to exit scam what is the worst case scenario? Let's use Binance or Bittrex as the example, would this implode their exchange? or would exchanges result in BAU regardless what happens. Can't really play this one out in my head.