You say the price will explode. But is that explosion just the relative price of bitcoin and tether? Tether is dropping to 0 and so bitcoin price "explodes" because you are still comparing it to tether.
Correct. Price of BTC denominated in Tether goes up, price of BTC denominated in USD likely goes down, as a) Tether liquidates crypto assets to cover redemptions and b) people sell off their crypto assets due to uncertainty/fear in the market.
