The effect of deflation is abnormal increase in price which can cause Bitcoin to be overpriced in the future. My question is what do you think will be the adoption and usage rate of Bitcoin then, whether it will increase or decrease?
According to Satoshi, "lost bitcoins are considered donations," which means they will contribute to reduced circulation.
In such a case, the possibility of the price increasing will be high and the possibility of the price decreasing will be low; the law of demand is real.
But the question is: what will keep making people lose access to their wallets? Won't they learn how to protect their assets? And if such things keep reoccurring, do you think the common people who will want to start using bitcoin will feel safe holding it?