I think Tether is a way around for exchanges to handle USD without actually having to carry with the legal obligations that come with it. I agree with you, this SHOULD NOT affect bitcoin and the rest of crypto but it does. Too many people invest in crypto not as a new (better) way of holding value but just as quick way to make some of what they perceive as "real" money, so the fear of not having a quick way out (as Tether is supposed to be) makes crypto way less attractive to them. Markets are more about psychology than they are about real facts