Bitcoin mining revenue will become entirely provided by transaction fees as block rewards rapidly fade away.
There isn't infinite demand for Bitcoin block space. Higher transaction fees push people to 2nd layers (Lightning), side chains (Liquid) or custodial exchanges, etc.
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BTC price went up far faster than block rewards went down, creating a massive amount of revenue for miners in the short term.
The price would have to double every 4 years simply to keep providing the same block reward revenue. Price would need to go up faster for it to increase.
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The economics of this don't support the kind of paperclip maximizer that it's portrayed to be at all. I think it's likely that the mining revenue stays about the same going forward i.e. price doubles about every ~4 years and people avoid paying orders of magnitudes more in fees.
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More cost efficient miners keep driving out the others, as always. If the cheapest power is subsidized coal (often the case now), they'll use that. If the cheapest approach is running your own power plants, they'll do that. If wind is cheaper than coal, they'll use wind power.
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That's the basic economics of it. Mining hardware gets massively more efficient too, so old mining ASICs lose relevance over time.
People won't pay 1000+ USD worth of BTC for each payment so clearly mass adoption would have to be via 2nd layers, side chains, etc. not on-chain.
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People who have Tether are short on BTC not long on BTC. They're short on BTC to the point that they're holding a sketchy/risky USD stablecoin because they think BTC price will go down. Really, most are just people speculating on the price and day trading. Not Bitcoin users.
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If someone thought BTC price was going to go up, they'd be selling their USDT for BTC. If they thought USDT was going to fall apart, they'd do the same.
I don't think USDT has much relevance. Bitcoin kept going on fine after many other sketchy exchanges pulled scams, etc.
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Assume that Tether turns out to be a scam and the value is entirely wiped out. Okay, so all those people holding it have their imaginary USD stablecoin money zeroed out.
They sold their Bitcoin for a scam. The people who scammed them sold it for real USD. Both already happened.