Now a day later I'm not so sure it will have a very strong impact. the market cap ratio to total market cap in cryptos seems tiny.
But Tether reeks for sure, I am guessing the official structures have something to do with it.

Talking about tether having no backing but claiming the dollar is anything different is kind of short-sighted. But super popular still, so many people say so.

Guess we'll see what comes out of this. But I do not believe that it will practically kill cryptos or their viability in the public perception. If anything probably a temporary dip and a wave of mistrust until it picks up again.