That is simply not true. Neither the money supply nor the market supply decreases when someone holds coins. If someone offered you $100 thousand or $100 million for those coins, would you sell them? Yes, so they are still counted as supply. Only if you destroy the coins would they be removed from the the market supply and the money supply because could never be sold or circulated.
Coin holder decide how much money supply there will be in the market, not the bidder. FED has printed 5x more money since 2008, and you never notice anything's price going up by 5x, because banks hold majority of those money and never move them, so they are not entering circulation and will not cause inflation
The reserve holder typically have long term plan than simply profit from selling his reserve. If I have 100 bitcoin and someone offered me $100 million for 100 coins, I would maximum sell 5 bitcoin, since that is enough for me to spend for a while and does not affect the exchange rate too much. Similarly , if Satoshi have 1 million bitcoin and someone offered this price, he might still sell maximum 5 bitcoin, but his reserve's value will raise to 1 trillion
This is correct, and a great example. The FED printing all that money after 2008 hasn't resulted in massive inflation because that money hasn't made it all the way to the money supply. If it did, you would see the inflation you would expect, but it's not part of supply right now, even though it exists. Perfect analogy to coins being held off exchanges.