We should know that to increase its value our money should be out of our pocket and circulate in the economy
like in real economy
Though it is important for bitcoin economy that most of the bitcoins should be in circulation but i don't think that just because if some of us hold some of our coins the economy will be affected at all.. because we don't hold hundreds or thousands of bitcoin and nor we can because at the end of the day we will have to use them somewhere..
It is not that bad if we are going to spend some of our bitcoins but for some who are holding thousands of bitcoins they are the ones who still have contribution and knows that spending is a good way to make the price of bitcoin increasing. And if nobody will spend bitcoins for sure those people who are holding a lot will be force to spend it.
If these cryptowhales spend their bitcoins buying some luxury things like Tesla cars and then the seller converts the proceeds back to fiat, in my view, it wouldn't be any different if the whales themselves first converted their stash to fiat and then bought what they wanted directly with fiat. There may be some nuances of course, but the bottom line would be mostly the same.