Not saying this is true, however, I believe the fear of deflation on the "non-shrinking money supply" is that if the money supply doesn't expand beyond a certai

Not saying this is true, however, I believe the fear of deflation on the "non-shrinking money supply" is that if the money supply doesn't expand beyond a certain point (e.g. bitcoin 21M limit), folks will horde the medium of exchange instead of spending it. With less demand for goods because no medium of exchange to purchase it, prices drop. Caveat: this presupposes that Bitcoin will become a medium of exchange.