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 the number of bitcoin in 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?
Though I can say that carelessness or lack of proper information on how to store their coins contributes to loss of Bitcoins. But then some other factors like natural disasters or death can lead to loss of such coins. A lot of people, keeps their privacies even till death. And lost times these kind of people owns large amount of Bitcoins and due to so many reason they hid it away from everyone even their loved ones doesn't even know about the amount of btc they hodl. Many of these are some reason why lost coins might be in the increase.
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?
definitely from all these lose, and it's limited supply, the price of BTC will be on the rise in the nearest future.