Why Does Bitcoin Cash Trade at a Discount to bitcoin?

 It has not attracted miners, since its difficulty rating is unstable and it is not clear how much money, if any, a
miner can earn by validating transactions.

 China eliminated cryptocurrency exchanges in September 2017, thereby forcing Chinese investors to sell
bitcoin and Bitcoin Cash prior to that date. There is a large universe of bitcoin buyers. There is not yet a large
universe of Bitcoin Cash buyers.

 This is because most exchanges have chosen not to support Bitcoin Cash.1
These exchanges will not execute a purchase order for Bitcoin Cash. Indeed, many will not even hold Bitcoin Cash in wallets and are forcing sales.

 Custodians such as Xapo2 are refusing to support Bitcoin Cash, and all Bitcoin Cash must either be sold,
removed, or converted to bitcoin from Xapo’s cold storage3 by mid-December, forcing yet more sales. Thus,
for the next month or two, there will be relentless selling of Bitcoin Cash by small holders. It is gradually being
accumulated by big holders.4 Eventually, the selling will abate.

 Once forced selling ceases, one will be able to measure the willingness of large investors to value the coins
based on purchasing power. Using current prices of the Bitcoin Cash relative to bitcoin, if the thesis of similar
intrinsic value is correct, one might be able to make a return of 15x or greater5
.
 Bitcoin Cash, once accumulated by several large owners, will, in our opinion, find some use as a medium of
exchange. Perhaps this might form the basis of a cryptocurrency futures contract for institutional investors.
Perhaps it can be the basis of an international money transfer application for banks, inasmuch as a small
number of banks could purchase much of the available supply and, in effect, create a semi-private blockchain.

 Bitcoin Cash should be regarded as more akin to a corporate spin-off in the world of equities than a fork in
cryptocurrency. In the days before spin-offs were as broadly recognized as they are today, there was usually
a 5-6 month period of time until a bona fide ownership base was established. In the case of Bitcoin Cash,
more than 2 months of this process has already elapsed.