The bank doesn't magically create money
It absolutely does. I'd suggest having a read of this article from the International Monetary Fund:
https://www.imf.org/external/pubs/ft/fandd/2016/03/kumhof.htm. And if you are really interested and have the time, take a look at this paper published in International Review of Financial Analysis:
https://eprints.soton.ac.uk/372866/. A relevant quote from each below:
Assume that a banker has approved a loan to a borrower. Disbursement consists of a bank entry of a new loan, in the name of the borrower, as an asset on its books and a simultaneous new and equal deposit, also in the name of the borrower, as a liability. This is a pure bookkeeping transaction that acquires its economic significance through the fact that bank deposits are the generally accepted medium of exchange of any modern economy, its money.
It has been empirically demonstrated that each individual bank creates credit and money out of nothing, when it extends what is called a bank loan. The bank does not loan any existing money, but instead creates new money. The money supply is created as fairy dust produced by the banks out of thin air.
Essentially, if you take out a new loan of say $100, the bank creates both a credit of $100 and a debit of $100 in your name. You are given $100 of new money and also given a $100 debt to repay. The bank's balance sheet doesn't change, and they don't move any money out their reserves to cover your loan. The $100 loan is brand new money created out of thin air.
This is impossible to do with bitcoin, since if you were to take out a loan the bank HAS to give you the relevant amount in bitcoin so you can transact it.