Well people will continue to buy something what they want to buy. But I was wondering why no one spends bitcoin? there must be a valid reason before that happen?
The valid reason behind holding bitcoins is simple, to just grow their value with the time as bitcoin is a currency that grows its value with the time so if someone does not spend his coins his purpose would simply be to have more in coming time.
But if everyone will keep on holding their coins without spending it then it will never contribute to its higher price in bitcoin and it will make bitcoin a weaker currency, so for better future of bitcoin we should spend them.
What you said is correct, until their is no spending of bitcoins we cannot reap the benefits of it and the price will be stable and then automatically the interest on bitcoin investment will go off by most of the users. Trading of bitcoin will make the coins worth more and we can see the price increase only by that way.