Why do people still think a shrinking supply means a rising price?

The market will estimate a value given all information on future supply and demand that is available. Planned shrinkage will give you exactly zero price change in the future.

After that, any uncertainty about the supply gives you a further risk discount on the value. It will also limit its usefulness in finance, do you want to take a debt in a unexpectedly appreciating denominator?

Maybe the possibility of a shrinking supply works as a marketing gimmick, it certainly won't won't make for a more useful currency.