I still don't understand why people would sell their crypto when the subject being discussed/judged here is one exchange and one stable coin. I mean, if they eventually go down, won't that mean USDT and Bitfinex will just disappear but BTC will stay?
Sometimes the market is really weird. As long as it's bad news for whatever reason it can move the sentiment quickly.
The thing that many people worry about is that Bitcoin's dollar value has largely been created by Tether - quasi dollars created out of thin air. That will cause everyone to wonder about the valuations they've taken for granted. Tether absolutely dominates trading volume, though of course most of that trading volume is fake so it's kind of moot.
Tether has always had more power in the market because of its nature as well. Every time they issue more of it it's new money entering, not the same old money sloshing around.
These revealments at least point to Tether having the backing they always to claimed to have, until Bitfinex helped themselves to it of course.