>Does the supply-shock effect of the halving go down each time a halving occurs?
Yes it does, as obviously reducing the block subsidy by 25 bitcoin in the first halving was a bigger drop than reducing it by 3.125 (as will occur this time). This does not take into account however how demand may increase, like from new institutional means and interest to buy BTC which did not exist for prior halving epochs.

Additionally, there is bullishness in the possibility that due to BTC becoming more absolutely scarce, more individuals may wake up to the potential of that in this very fiat inflationary environment. And they may simply be tempted to speculate that bitcoin will continue to perform like it has in the past after previous halvings. Most people are only familiar with relative scarcity, for example the scarcity of precious metals. When gold for instance becomes more valuable, it incentivizes people to bring more of it to market so they can benefit from the higher prices. For example: miners exercising new means of more efficiently extracting it from the earth. In contrast with the strict absolute scarcity of Bitcoin, the amount of new BTC added to the market can only decline over time regardless of how high demand for it might be. This is more of a theoretical way of stating things however, and a more meaningful way of comparing scarcity from one asset like gold to bitcoin would be looking at their respective stock-to-flow ratios. As the amount of BTC to be mined reduces over time, the stock to flow number (s2f ratio) increases, as supply coming onto the market is reducing. S2F = existing supply of something already on the market / amount of supply added last year.

See pic related if curious for additional information concerning S2F.

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