I mean, just think about it for a moment: how many bitcoins were "lost" today? Was it 0 or 100,000? Perhaps it's -100,000, because somebody gained access to 100,000 that were previously lost.
If it doesn't make a difference, then the supply isn't affecting demand
If it DOES make a difference, then demand can't be affected, because nobody knows whether it was 0 or 100,000 or -100,000
If people have to know supply and demand to determine prices, how can free market work for thousands of years before the basic principle of economics is established?
1. 10% of all BTC holders want to cash out. nobody lost their keys, so 2M BTC hit the “supply side” of the market.
2. 10% of all BTC holders want to cash out. half of them lost their keys, so only 1M BTC hit the supply side of the market.
this is the way it makes a difference. in the latter scenario, BTC spot price would likely reach a higher value.