But unlike the fiat system, no Bitcoin is going to be printed to make people whole again.

The worst case scenario is that Bitcoin price drops for a while, like when FTX, etc imploded.

If WoS or GetAlby are running a fractional Bitcoin reserve I doubt it will have much affect. The biggest fractional reserve risk is in exchanges or custody providers such as Coinbase & Gemini. Not your keys, not your coins is a lesson to be learned many times.

Custodial spending wallets are not the risk you think they are unless a single service becomes dominant. Bitcoin is permissionless money, it will always be desirable by those who seek to steal from others.

I ain't holding no privacy shitcoin longer than I need to. I'll gladly hold a million sats in my WoS account though. I'll take the small custody risk over the certain loss of value over time. 

 hey thanks for writing in, please see the thread with shortwavesurfer below on the same topic