Can price of steem rise even if inflation is that high?
Steem is issuing more coins every year. The total supply about doubles every year. That is 100% inflation! How can't this be a problem? Steem power however earns you more steem protecting you from inflation, so when you don't convert your steem into steem power you will lose money over the long run?
The original economic model for Steem included inflation of 100%. However this was revised back in 2016 with Hard Fork 14 to a scale starting at 9.5% and decreasing over time. Currently Steem has inflation of around 8.7% (according to website steemdb.com).
You can see the full supply table here for the next 20 years:
https://steemit.com/steem-inflation/@fyrstikken/what-is-the-inflation-rate-of-steem-here-is-the-supply-table-for-the-next-20-years
The question is still valid though. All other things being equal, the 8% inflation rate should act as a drain on the price of Steem. However at this early stage in the coin's existence there are many other factors that also influence the price. If Steem continues to develop then the inflow of investment and demand could raise the price faster than the drain from the additional coin supply.
Holding Steem Power (SP) does not directly protect you from inflation. However it is true that there is a small interest rate on SP and higher curation rewards with higher SP. There is also (I would say) a greater potential to earn more Steem and SBD through posting if you have more SP. Although it is also possible to earn rewards without holding much SP, as long as you have the basic level required to have enough bandwidth to post.
Holding liquid Steem on the other hand gives you the potential to trade on the markets and gain (or lose!) some additional revenue through this route.
Overall it is not clear cut to say that you will lose money in the long run unless you convert into SP.
[Not financial advice, please do your own research]
View this answer on Musing.io
It is important to remember that STEEM supply increases by 100% every year, if the market capitalization, or the total value of the network, remains the same, it will require Steem coin prices to drop by 50%. Steem is subject to inflation. This is a short-term trading vehicle. This is not intended to be held for a long time; it is intended to be traded. Steem power is a long-term investment vehicle.