The inflation if hive is still relatively high - more than 7% p.a. compared to Bitcoin's current inflation rate of 1.8%. Including also the proceeds from the Hive DAO, this rate is increased even further. While I would argue that the share of inflation going directly to the market is lower than in the case of Bitcoin, still a fair share is being sold immediately. If we were to cut the inflation by 50% I would thus expect the Hive price to react much more positively than the Bitcoin price.
Any PoS shitcoin is capable of low inflation. That doesn't automatically translate into a higher market cap.
In the past, we have seen already which negative impact the constant selling of Steem by STINC had on the Steem price and I am convinced that the fact that this is now over on Hive is one of the reasons why the Hive price is significantly above the price of Steem some months ago.
I would be surprised if Steemit, Inc were still selling at the rate it was before February. Three of the most highly paid employees of Steemit, Inc quit: all the developers they had on board as well as the head of communications. As far as I know, they haven't hired replacements.
Reducing the inflation could result in an additional boost to the Hive price, which would likely attract new investors and users. Indeed, I remain convinced that halving the inflation could result in an increase of the Hive price, which would over time for content producers more than compensate the loss from lower inflation.
That would also consolidate the top heavy stake distribution. The impact on network security would be negative as we learned or at least should've learned from the Justin Sun debacle. The only people benefiting from a lower inflation but higher token price would be the current whales.
Besides, altcoin speculators do not care about which single digits the inflation rate of a coin is. Not at all. And this is demonstrably true. Consider the fact that STEEM went from 7 cents to $8.5 from March 2017 to January 2018. The price went up by over two orders of magnitude in less than a year! An annual inflation rate of 8.5% is absolutely nothing compared to that.
Altcoins are quasi-derivatives of Bitcoin. Their own exact inflation rates are meaningless from a speculative point of view. Sentiment and hype are everything. When it comes to the use case of HIVE, a "high" inflation rate of 8% makes it possible to put the coin into the hands of a lot of people. HIVE has one of the best distributions in the entire industry. Let's not ruin that by shutting down the inflation.
Sure, it does not mean that this will happen automatically. But it does shift the supply curve and would thus result in a higher price - all else being equal. How much higher - this would need to be seen.
Unfortunately, there is still a lot of circle and buddy voting - so I am not sure on that. If all the inflation would go to good content producers, I would be with you. I am afraid, though, that this is not the case.
This is for me a sign that the supply curve of Steem and now Hive is rather flat as supply is rather flat. Either people sell at any price anyway or they do not sell at all as their Hive is powered up. This shows me that a small shift in the demand curve might result in a huge price increase.
Most STEEM and most HIVE and are on exchanges. 220 million HIVE are liquid (including HBD). The vesting fund is only about 150 million HIVE. There is, in fact, so much liquidity on the markets that even if all of the inflation were sold immediately, the difference between inflation rates of 8% and 4% per year would be practically insignificant.
There is A LOT of dumb money on the cryptocurrency markets. The last big bull run of STEEM too took place after Bitcoin had rallied first. People who either made big fat profits on Bitcoin got greedy and some people were late for the Bitcoin train bought SBD and STEEM hoping for a pump, which took place. That's how the altcoin market works. In a way, they are a means to making leveraged plays on Bitcoin. There is so much volatility in HIVE that most holders prefer not to power up their coins. A whopping 200 million are kept on exchanges. Inflation rates simply don't matter much. Altcoins are not digital gold.