The demand is supported by the "peg".
There is a profitable trade, people will buy.
If BTC is rising faster than the scBTC, do you think people will not buy the scBTC?
It doesn't matter much what the feature the side chain adds, or whether there is demand for the feature. The feature matters less than the prices.
The losers will be the folks waiting on confirmations when it unwinds.... or if it doesn't unwind, BTC holders lose liquidity (which could cause the pump to go higher than it otherwise might).
There is a profitable trade, people will buy.
If BTC is rising faster than the scBTC, do you think people will not buy the scBTC?
It doesn't matter much what the feature the side chain adds, or whether there is demand for the feature. The feature matters less than the prices.
The losers will be the folks waiting on confirmations when it unwinds.... or if it doesn't unwind, BTC holders lose liquidity (which could cause the pump to go higher than it otherwise might).
I fail to see what the profitable trade is.
You said BTC price rises faster than scBTC so one would think people would want to buy scBTC at discount but then you say that scBTC is actually going for a premium because of convenience to avoid SPV confirmations.
There is money to be made simply from SPVing coins, and then selling them at exchange to anyone that wants them but does not want to wait for SPV confirmations (which will be more than the exchange will require).
Which is it
If BTC price rises faster and you are holding scBTC why sell scBTC at discount to exchange buyers when you can use the peg to claim equal value to BTC?
Otherwise it sounds to me like you are describing a regular arbitrage type play. Something only speculators would take part in and I honestly don't see how this can scale to the extent that BTC would lose significant liquidity.
How do you describe it "unwinding". How does those waiting on confirmation lose?