Edit: Satire, guys. Sadly, it sometimes becomes indistinguishable from actual misconceptions. Don't believe me? Similar post from my history: https://news.ycombinator.com/item?id=7227291
The aspect of bitcoin that is "unregulated" by the US government (meaning "not controlled by" the US government) is the production of bitcoin. In that respect, you can think of bitcoin as similar to a bog-standard foreign currency (which the US does not control the production of).
It does fractional reserve banking - some proportion of the bank's assets are indeed held in liquid currency, but the rest are held in assets (read: interest-bearing loans) that are worth of the sum or excess of your deposits.
If every depositor tried to withdraw from the bank all at once, the bank would be in trouble and it would likely have to rely on deposit insurance from the government to cover it.
Now this is another interesting thing -- the market value of the bank selling a loan fluctuates inversely with interest. If they have a loan that a customer is paying 8% on, then that loan has a market value much higher if current rates are 3%, and much lower if current rates are 12% (assuming the risk of the loan doesn't change -- that also affects its market value).
Your bank almost certainly doesn't. Check out fractional reserve banking.