plus efficient market hypothesis and the Iranian power grid
Comparing the market cap of Bitcoin vs Tether doesn't say much. Market cap is by itself a very flawed way to approximating value. Just because there is a handful of individuals willing to buy the next Bitcoin at 35k doesn't mean all Bitcoins are worth 35k apiece.
Approximately only 1/5 of all Bitcoin is liquid while Tether is pretty much liquidity itself. Tether's impact on Bitcoin's price is undeniable, when new Tether is introduced, Bitcoin's price goes up because there is an increase in purchasing power for Bitcoin.
However, I think Bitcoin will be unaffected if or when Tether is revealed to be a massive fraud.
Suppose Tether suddenly becomes worthless, or suppose it is revealed to be only worth a fraction of a dollar, for simplicity, lets say a Tether is backed only by a dime. What happens?
Bitcoin's exchange rate against Tether will go 10x. Bitcoin's price will go up, not down. Bitcoin is not the one revealed to be fraudulent, Tether is. Tether's value plunges, its 1:1 association with USD will be severed, BTCxUSD will not be affected.
In fact, BTCxUSDT will go even higher as Tether holders scramble to liquidate their holdings amidst fears of further fraud.
Longer term however, if BTC demand does not recover, prices could tank, but Tether will simply be replaced by another stablecoin.