Any pegged coin in an unregulated, volatile marketplace is a shitcoin.

One of the major criticisms of the crypto market is that there are so many people trying to create money out of thin air.
Trying to peg a coin to a real life asset to when there are no laws or insurance in place to guarantee that liquidity when you want to cash out is very scammy.

In America, ever since the great depression there have been regulations in place to protect your money and to also protect those who lend.
What protection do you have with tether or any other ones?

Aslo, get real here, you seriously think a company like tether and all it's shady dealings has the means to liquidate 2.5 billion dollars?
And those that try to have a crypto be backed by a real life asset like precious metals.
It is way better to just buy the actual bond for the precious metal instead of some fake "certificate" coin.

Sorry, you're right. It wasn't a full audit, but it was a report which concluded that tether does have enough USD to back it up. If you believe this or not is really just personal opinion. Personally I still don't fully trust it.

If you're selling for good out of bitcoin, then yes I would try to convert to USD as fast as possible and get your money off of exchanges. If I think that I will sell Bitcoin and re-buy in a week or so, that's when I'd sit on the tether. I always feel scared leaving any crypto on exchanges, and leaving tether on an exchange just seems even riskier than that. If the same thing that happened to Mt.Gox happens to an exchange holding tether, I don't think it would even be possible to pay back any of the people who lost their coins. At least Mt.gox still had a stash of bitcoin, so they were able to pay people back since this had risen in price.

There's a ton of bad press about tether, however it has gone through audits and they've apparently shown that tether is actually backed by real money.

In my opinion the pegged cryptos are only meant for short term holding, it doesn't make sense to me that you'd convert USD into tether just to hold onto it for a long time. If USD drops in price, tether will too since it's pegged to USD.  These cryptos are more for short term trades, so you can convert bitcoin into a form of USD without actually taking your money off an exchange and converting it into fiat.

I would not feel safe holding any of these backed cryptos for a long time since they feel a lot more risky than just holding bitcoin or any of the larger alts. If crypto does get banned, you're going to have a very hard time converting the backed crypto into fiat.