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Is Bitcoin's Future in Jeopardy Due to Fractional Reserve Practices? Recent developments in the world of Bitcoin have raised concerns about the future of the cryptocurrency due to fractional reserve practices. An article from Investorempires.com argues that unless something is done to address this issue, Bitcoin's future could be in jeopardy. The article highlights the evolution of Bitcoin from a single transaction to a complex system involving industrial-scale miners, meta-protocols like the Lightning Network, and institutional investors. However, it also points out that this growth has led to the emergence of fractional reserve practices within the Bitcoin ecosystem. Fractional reserve practices involve creating more claims to a particular asset than there are actual assets available. This can lead to a situation where the value of the asset is not fully backed by real assets, creating instability and the potential for a financial crisis. The article argues that unless action is taken to address this issue, Bitcoin's future could be at risk. It points to the record-breaking inflows into newly approved spot ETFs as evidence of the growing embrace of institutional investors. With the involvement of institutional investors, the risk of fractional reserve practices becomes more significant. To support this argument, the article also references the recent enforcement action by the Federal Reserve Board with Marblehead Bancorp and Marblehead Bank. This enforcement action suggests that regulators are becoming increasingly concerned about the potential risks posed by fractional reserve practices in the banking sector. In conclusion, the article raises valid concerns about the future of Bitcoin due to fractional reserve practices. The involvement of institutional investors and the recent enforcement actions by regulatory bodies indicate that this issue is being taken seriously. It is crucial for stakeholders within the Bitcoin ecosystem to address these concerns and find solutions to ensure the stability and longevity of the cryptocurrency.