Secondly, why do people even trust stablecoins? You move to crypto to get away from centralized fiat issued by a government and held in a bank, and then you buy a centralized stablecoin issued by an exchange which you can't even cash out? I just don't see the point.
The interesting part is that people don't trust them. It really seems that in order to do their arbitrage trading between exchanges, which seems to be one of the main utilities of stable coins, people are willing to take that risk. On top of that, they don't plan to cash out any of it to fiat anyway, so the risk for them in this case is pretty low.
Most people acquire USDT by buying Bitcoin locally, sell it for USDT on exchanges as Binance, then trade whatever shitcoin, and then later when they are done trading, they go back to Bitcoin. They don't need Bitfinex as exit point, and this is exactly how USDT remains in circulation, which is positive for this market as a whole.
