The trick here is that it is currently impossible to sell Tethers for USD. The only Bitcoin exchanges that trade Tethers do not trade in USD and artificially tr

The trick here is that it is currently impossible to sell Tethers for USD. The only Bitcoin exchanges that trade Tethers do not trade in USD and artificially treat Tethers as being worth $1 USD. So instead of a devalued Tether resulting in a fall in the price of Tether it reflects as a rise in the price of Bitcoin. The thing that is harder to explain is that if this theory is true we should expect that the price of Bitcoin in Bitfinex to be higher than in other exchanges. I suspect that what is happening is that the rising prices in Bitfinex are helping attract a new wave of speculation and/or price manipulation, which is what is pushing up the price elsewhere. (This is what happened in the MtGOX bubble)