Works for me (also on Arch btw)

If you haven't found a solution as of yet, passing the -vgui flag to steam on launch fixed it for me. This launches Steam in the old UI, which seems to be a workaround for the time being.

I'm not entirely sure what the core issue is, the consensus from what I've read so far seems to point to a Nvidia driver issue introduced in a recent update.

I wanted to make a clean Linux install so I could also see if the problem persisted on another distro. So from Arch to Fedora the problem is still there, I believe it comes from Wayland/Nvidia/Steam which have issues since the last Steam. update but I can still play windows games on Bottles/Wayland/Nvidia.