According to research by blockchain analytics firm Chainalysis reported on 20 August 2018 by Bloomberg, "concentrated ownership" of Bitcoin Cash (BCH) -- with just 67 wallets in control 56% of BCH -- is responsible for its low adoption in commerce.
Chainalysis says that BCH is hardly being used for commerce. The firm reviewed payments received by the 17 largest crypto merchant processing services (such a BitPay) from BCH's inception in August 2017 to May 2018, and found that in 2018, BCH payments totalled $10.5 million in March, $6.2 million in April, and $3.8 million in May.
In contrast, BTC payments for these three months were $80.2 million, $69.9 million, and $59.9 million respectively. In other words, although payments for both cryptocurrencies showed declines, % declines in BCH payments were much larger.
Bloomberg says that these declines mirror the drop in the value of these two cryptocurrencies this year, with the BTC depreciating by 55% while the BCH price has decreased by about 75%.
In fact, looking at data from CryptoCompare for BTC and BCH for the period 1 January 2018 to 20 August 2018, we see similar numbers: the Bitcoin price has gone down from $13,444 to $6,269 (i.e. a drop of 53%) while the Bitcoin Cash price has declined from $2,319 to $513 (i.e. a drop of 78%).
Kimberly Grauer, Senior Economist at Chainalysis, told Bloomberg in a phone interview:
"There are fewer users of Bitcoin Cash, fewer holders... Adoption in commerce has been low, partly the result of concentrated ownership."
In fact, according to Chainalysis, just 67 wallets (not hosted on crypto exchanges) control approximately 56% of Bitcoin Cash. And Grauer believes that it is likely that "the wealthiest holders are the ones sending a lot of the traffic to merchant services."
Samoson Mow, the Chief Stategy Officer at Blockstream, wrote on Twitter earlier today that the "longer that $BCH exists without empirical success, the clearer it becomes that there is no interest in it & the weaker the hypotheses behind it hold up."