"Blood is thicker than water" is an old German proverb meaning that the ties and loyalties of family are stronger than those of non-family. I'm not sure of the origins of "You can choose your friends but not your family" but this saying is in contrast to the former. Which is true in your life?
For me, it would have to be "Blood is thicker than water", 100%. I've been messed around and betrayed by so many people in my life whom I thought that I could trust - it's a harsh blow when you find out that you CAN'T trust them, but only when it's too late. On the other hand, my family have never let me down, not even once. No matter what I say or do, they are always there for me, always support me. It's harsh when a friend betrays yor trust, treats you like dirt, and then manages to put a 'spin' onto things in such a way that YOU become excluded from a circle of friends. It really makes it difficult to trust people and take them at face value. BUT, I am a trusting person by nature and I do continue to get burned, I'm just no longer surprised when people hurt me.
In contrast to my situation, I know of someone who's blood family has let them down at every opportunity, turned on them and yes, even betrayed them - something that I would never do - so in this case "You can choose your friends but not your family" would be far more appropriate. When family turn their back on you, is that harder to accept than if it were an acquaintance? If a 'friend' lets you down, you can sever ties and walk away, not so easy to do when it is family and there will always be a connection somewhere, somehow.
I certainly feel very lucky to have the family that I have, if I COULD choose my family, I'd choose the one I've got!