If you send BTC to Bitfinex, and buy USDT, they can always supply as much as you need. But if it were backed by USD, then they should have supply issues during high demand, at least temporarily. It actually appears they are creating USDT at the market price of BTC. Oddly, when BTC drops in price, you'd expect them to destroy USDT to keep the peg as BTC value that lead to the creation of USDT was lost. But, they actually printed more as BTC fell. I didn't see if they quarantined more however, perhaps that's how they are propping up the price?: https://wallet.tether.to/transparency
All tethers are pegged at one-to-one with matching fiat currency (e.g., 1 USD₮ = 1 USD) and are backed 100% by actual assets in our reserve account. As a fully transparent company, we publish a real-time record of all value held and transferred in and out of our reserve account.
They don't do this. An audit would be easy. That's what stinks the most. If they could audit, I am sure they would.
I definitely wouldn't hold any.