Why is exchanging 1 BTC into 10,000 USD on an exchange more expensive then exchanging 1 BTC into 10,000 USDT - as long as you don't withdraw it?
Is it because you don't trust the exchange to honor your USD withdrawal the next morning?
What makes you trust that Bitfinex is more likely to honor USDT to USD exchanges the next morning?
It's almost certain that USDT isn't actually backed 1:1 by USD. If it were, it would be trivially auditable. You're just moving yourself from one category of potential risk (Your exchange steals your USD), into a category of almost certain risk (The shoe drops and we discover that USDT was a scam all along.)
In addition, it's more "liquid" too. It's easier to turn tether into pretty much any altcoin on most exchanges vs turning USD back into altcoins.
There's still a belief in some circles too that a crypto/crypto transaction isn't a taxable event, which isn't true anymore. Regardless, some either believe this or know it's not true but find it easier to tax-evade this way.
