There's a pretty big difference between increasing the money supply by loaning money, borrowing from the fed at the discount window, and creating money out of thin air to use however you'd like.

'Printing money' is, in the context of the Fed, a metaphor for incrementing numbers on bank computers.

But the fed isn't the only one who can increase the supply, is my point. Any bank can do this.

While that's true, isn't the exact same true of any currency (including BTC)? In principle, a bank could loan BTC with a fractional reserve and produce the same outcome, could it not?

I suppose banks could create some sort of financial instrument that says "IOU 2.5 BTC" or whatever, but this thing they create couldn't pass off completely as bitcoins, since you couldn't spend this thing on the blockchain like you can with ordinary bitcoins.

Maybe this will happen. Who knows.