It doesn't matter if they decide to buy up all the Bitcoin.. because they'll only be driving the price up for all of us. Furthermore, if the banks start using Bitcoin that is a good thing also, because they will no longer be able to loan more than they own and they'll be caught up in a more fair system. 😀
If they are buying up all the Bitcoin I can assure you they won't make it public. Because if we knew for sure, nobody would be selling their bitcoin anymore at current prices and it would cause it to skyrocket! So what you want to do, if you want to buy all the Bitcoin, is go and cause some FUD, create some regulations to discourage people, and then secretly buy it under the radar whilst prices are low..... which seems like what is happening right now!
Long story short: HODL and do not sell!
Edit: Also, the more USD they print the more they de-value the dollar, whilst increasing Bitcoin's price. Since Bitcoin is divisible into tiny bits, that's great!
I would think it would be more like the banks buy bitcoins and shelf them to take them out of circulation. And yes prices will appreciate greatly but each coin that hits the market they will eat up just like they did with gold.
Yes holding will prevent this but how many are buying bitcoin with the intention of remaining in it for decades? I have a feeling most are speculating on a fairly quick profit (a few years).
And yes, what you posed in your second paragraph appears to be wha tthey are doing.