Free money. Did that just happen with bitcoin cash? It sure seems that way.
If there's no such thing as "free lunch" in economics, how can BCC be worth 0.2 BTC and still have 1 BTC = 1 BTC happen after the fork? Bitcoin (like the dollar or cigarettes or raisins, or whatever other tradable commodity) really only has the value we assign to it, so we can maybe see why BTC didn't go DOWN by 20% after the fork. But where did the money come from to create Bitcoin Cash?
It took me a while to think this one through. And the answer is in EXCHANGES. Think about it. Let's say that 1BTC=5000USD, and the futures of Bitcoin Gold (the next hard fork) is equal to 1 BTC ($5000). This is most certainly overpriced, but if it were true then the entire market "capitalization" of the space would immediately double after the fork ($10,000). However, let's say that there were some very troubling unforseen issues after the fork that caused the price of both to plummet 80%. This would mean that 1BTC would equal $1000... essentially falling by $4000 and 1 Bitcoin Gold would also fall by $4000 . Putting these two together, that would mean that the exchange would have to compensate sellers $8000 worth of USD to reach the market value price. The problem is that the exchange only had $5000 (the original price of bitcoin alone) to begin with! This would trigger immediate bankruptcy of the Exchange and likely spiral the bitcoin price even further down as more and more exchanges go bankrupt.
Fortunately, we had a nice RISE after the BCC hard fork that avoided this. To my knowledge, no exchanges went bankrupt after the fork. But even now, there are likely long-term consequences of BCC's creation. By definition, every exchange that now carries BCC has 20% less USD in their coffers due to the fork. We just haven't seen evidence of this yet, because bitcoin's price has been outpacing these losses.
Ok it's a problem. But downfall for bitcoin?
It's at the very least bad omen. But there is actually POSITIVE economic incentive to place forked coins on exchanges, since every customer likes the idea of free money and are pissed if their exchange didn't give them what another exchange would have. If bitcoin continues to fork and place the result on exchanges, even a tiny dip could mean the unravelling of the whole purpose of blockchain and the value of bitcoin as we know it.
On this note, Ethereum may meet the same demise if it begins putting more hard forks like Ethereum Classic on exchanges. But it seems less likely, given a more centralized community.
In summary, I say beware hard forks! They look neutral if not good in the short term, but the long term implications are less favorable.