Bitcoin and crypto’s issues in general stem mainly from an ill-informed model of how the system should work. Fractional reserve banking was never and can never be a functional model for bitcoin.
Thinking of Bitcoin as literal in your hand gold would, in my less-than humble opinion, significantly clarify how Bitcoin should be used. It’s not meant to be an interest bearing instrument such as a CD or interest-bearing savings account. It’s only ever usable purpose is a store of value over time. How that value is set depends only on what people are willing to trade those “coins” for in the real world.
Bitcoin’s biggest fault is the expectation an average bitcoin holder assumes for those “assets.” Most often they’re purchasing Bitcoin only in the hope/expectation that it will increase, drastically increase, in value. Almost like playing the lottery. Yes some will win, most will fail to find anything of value.
Using what I’m going to call the gold model we can start to solidify the intended and only sustainable use-case.