The price is falling, so talk of manipulation and fractional reserve is increasing proportionately. There is no manipulation.

At least not enough to make any difference whatsoever.

Fractional reserve isn’t something that works for anything other than small scam exchanges with the intention of rugging customers at some point. A single spike in bitcoin and the exchange would be liable for the USD amount when it’s sold, or worse, swapped, into another coin/token with the same reserve game ongoing. This could be limited with derivatives (like futures), but that’s an incredibly expensive hedge, because those trade with forward premiums that make hedging not worthwhile unless we reach extreme levels of oversold/overbought, which bitcoin doesn’t generally stay at for long. The volume on these futures products support what I’m saying. Leverage wouldn’t work either. The volatility is too dramatic. Consider (sorry I use this chart in posts so much) that the Weimar papiermark went hyper over a period of 10 years. Germany’s reparations they owed were priced in gold. Even people that bet correctly gainst the papiermark went broke. Why? The volatility was too extreme.

Fractional reserve works with banks because money is loaned into existence, central banks print the money, and the US government guarantees it.

Fractional reserve of bitcoin is suicide. I used to work helping build ledgers for offshore sports books. Many liked trying to play the fractional reserve game (with bitcoin and fiat), thinking just 10%-20% fractional reserve and they'd be safe. They'd always blow up very quickly, get rated F on SBR, shutter, and then reopen with a new name. There are many ways their fractional reserve schemes broke down too, its far tricker than you think, and every 1% more brings exponentially increasing risk.

The way successful manipulation at large works is by ownership. You’d want to own the majority of an asset or a majority of the asset’s infrastructure. This is how central banks have done gold, how OPEC does Brent, packers do beef prices, etcetera, fiat goes without mentioning. Futures again people bring up, but futures markets are 1:1, which means for every buyer there’s a seller. You can’t create more corn by creating more futures.

Bitcoin is beyond majority control games. 90% of bitcoin has already been mined. The next 10% will take over 120 years to mine, most of which will be accumulated by miners. It’s too late for governments and businesses to ever acquire a majority. Even 1% will be quite difficult to acquire and hold. Coinbase excluding customer deposits has about 5k BTC. The largest US miner Marathon Digital has about 7k. Microstrategy has 130k but they also have large amounts of debt on that. Grayscale tops the scale with about 650k, and that will effectively become the Americas’ ETF. All of the companies mentioned above are also publicly owned, with millions of shareholders. If global governments seized all customer bitcoin deposits on exchanges, and all custody bitcoin of businesses, they still couldn’t get a majority, but they’d probably get a war, and then they’d have to spend it. And since they can’t print it, it would end up back where it started (in people and business hands) because that’s what a deflationary system ultimately encourages.

Then we come to the other issue for would-be manipulators: BITCOIN IS A PAYMENT NETWORK, one that enforces rules, and only bitcoin travels on that payment network. It’s trustless. It also boasts a transparent ledger. That means it’s easy to see wether or not the money exists. That combined with its PoS scaling layer (the Lightning Network) will eliminate the possibility of fractional reserve from ever happening. The reason for this is the velocity of money. On the LN it’s extreme. It moves at the speed of light, settles instantly, costs almost nothing, and isn’t constrained by borders. This means over time, nobody will ever accept IOU bitcoin, because they never need to. Bitcoin is a unit-of-account, a store of value, a central bank, and a payment network, all in one.

Remember, the bitcoin circular economy is not here yet, and neither is a robust [non-custodial] credit market. Both are coming, and when they do, enough goods and services will be sold in bitcoin that exchanges won’t be necessary and will serve a different purpose (tokenized security broker-dealers perhaps of companies, products, and bonds). Fiat will cease to exist. CBDC’s of course will, and although those are nasty behavioral economic surveillance machines, they’ll pose ZERO risk to bitcoin. CBDC’s will be used for entitlements, and will require BTC to exist, as most tax revenue will come from it.

If you don’t want to get manipulated, then I’d suggest not going out and looking for manipulation in vehicles designed to separate people from their bitcoin, like trading, leverage, and swapping exist to do.

Bitcoin is a payment network, which ferries one of the only true free market assets in existence.

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