do u really need to b able to turn the wheel infinitely in the same direction?
or would a simple potentiometer suffice (no 360°... and u need to turn it in the other direction to get where u came from...)?
That would not suffice, because
If the movement is recorded by the sequencer and the sequncer plays back, the recorded values should be sent to the Arduino via MIDI and set the digital potentiometer values and at the same time the values should be displayed on the oled.
So endless encoders seem to be the correct choice here.