Great point. It would be taking those into account. Nonetheless, it represents 50% of the supply. So whether it's lost or in possession of investors with high conviction, there is only 50% to go around for everyone else.

What happens when 70% of Bitcoin has been held for 2 years? Then, there would only be 6 million Bitcoins for people to compete to buy.

This is about game theory. It's not definitive or guaranteed, but based on historical evidence, we can argue that there is a strong possibility that long-term holders for 2+ years will increase over time.