Many retail investors probably have. But the big Tether holders can't liquidate their large positions because it would likely cause a market collapse. Many holdings are on public addresses, so if for example a big exchange liquidated their Tether, everyone would know and start panic selling, leading more big holders to sell, and so on. And even if they liquidated through OTC or centralized parties that are not publicly known, the volume would still obvious.
Hence it's in the best interest of many parties to keep Tether up to avoid a market collapse.
Because it's incredibly convenient. It will keep being convenient until it crashes (I think it's position isn't as tenuous as people think tho') or a better competition arises, maybe the US government will print some crypto dollars or something.
That's buying and selling. So, whoever is facilitating the buying and selling needs to keep Tether inventory on hand so their customers can trade crypto generally. Those holders of Tether inventory -- exchanges -- will be "free" to redeem their Tether when crypto transaction volumes decline on their exchanges. So when the crypto ecosystem broadly loses cachet, beyond a certain threshold, exchanges that hold Tether inventory will be "free" to liquidate.
The issue at that point will be that exchange volume is the business value behind the "paper" that justifies Tether's USD peg. So declining crypto trade will generate sell volume against Tether and also pressure the peg.
Which is all another way of saying-- this is like when Enron or whatever other financial scandal you pick-- gave shares to an off-balance-sheet vehicle and loaned itself money from the vehicle. It's designed to fool someone into injecting real money into a funny system. Thus, an alternate mode of failure is that whoever did the injection wakes up and calls the bluff, notwithstanding the technical quasi-market-based peg.
