And the market appears to be pricing it accordingly. Markets are always right.
Discussion
If they actually can process the demand for withdrawals it will go back to $1 otherwise it will go to 0. It’s kinda an all or nothing
You're right. If it doesn't return to it's peg very soon everyone will lose all faith in it and rush to get rid of any USDC they're stuck with.
When (if?) they re-enable withdrawals there will be arbitrage to bring it back to $1 but if there’s too much arbitrage then they will have to turn off withdrawals again. At that point it’s Katie bar the door as everyone runs for the exit