Could bitcoin technically get lost permanently?

Let’s say I had 1,000 bitcoin stored in a physical, non virtual wallet or some other form of cold storage. If theoretically that storage were to be destroyed in something like a house fire, flood, super hungry llama invasion, or some other natural disaster… Would that bitcoin just be lost to the theoretical void forever at that point and never be able to be recovered? I could be way off base here but was genuinely curious. I am not very experienced with cold storage.

If this would be technically accurate then couldn’t we see a slow decrease in circulating supply over an indefinite amount of time? I know it would likely take a very, very long time for it to make a substantial difference but is this technically true? Or do I just not have the proper understanding of how cold storage is used/lost.