In order for BTC being the ideal medium of transaction, it is pretty bad that we have these crashes and panic sell offs. As for the sake of trading we need this because this is where most of the traders got their earnings, at the crash and dumps.
We are still at the early stage of crypto, that's why some panic sells specially for the whales are critical in order for the supply to be distributed to millions of people. If they will not sell, then there will always be a threat in the market in every moment because a single entity can make a dump and can ruin a stable price if he has a lot of coins.
To be honest, that's what I'm thinking myself, though the outcome largely depends on the causes of these massive panic sell-offs. If they are caused by a big whale and we discard collateral damage in the form of panic sellers at that, the net effect can in fact be a more even distribution of coins after all. The negative side effect may be that, though, more coins may actually be bought by fewer hands, so we can't say it conclusively whether panic sell-offs really contribute to a "productive" redistribution of coins in a major way.