Trying to understand paper Bitcoin and price manipulation/debasement.

Between self custody and lost coins how much room could there be for exchanges to create Bitcoin Iou's and not potentially get wrecked if a large portion of customers try and transfer to self custody in a short window of time.

Is this currently more of an issue because of a higher liquid supply? Meaning hopefully in the future, as more coins are bought up, held, and transferred to wallets; the amount of Iou's would be dramatically reduced?

So right now, because of most exchange practices with Iou's; it's being manipulated more like a stock. but as adoption grows and less liquidity is achieved it will become a/the more stable currency it was designed to be. At that point there would be more of an honest "price" realization and less volatility? Am I understand this right at all?

Excuse my run on sentences. I hope no one had a stroke reading this. I'm just looking for assurance that I'm properly understanding the way things are working.