You are correct, I hadn't taken the difficulty-adjustment into account. So that means a lower Bitcoin price does force miners out of the market, but after at mo

You are correct, I hadn't taken the difficulty-adjustment into account. So that means a lower Bitcoin price does force miners out of the market, but after at most 14 days, the difficulty would adjust to stabilize at 10 minutes/block. That might still create a period of instability where the network lacks hashing power, but it's not nearly as bad as I thought. And since the same number of transactions would be achieved with less hashing power, I guess the environment would gladly see Tether collapse :P