The meteoric rise of Bitcoin in recent years has captivated global financial attention, particularly as it crossed the historic $100,000 threshold in late 2024. While Bitcoin’s rally has been fueled by institutional adoption and regulatory milestones like the approval of U.S.-based spot Bitcoin ETFs, many assets closely tied to its ecosystem—such as Bitcoin Cash (BCH) and Fractal Bitcoin (FB)—have failed to keep pace. Despite shared origins and technological alignment with Bitcoin, these projects have underperformed both in price and ecosystem development.
This article explores the divergent trajectories of BCH and FB amid Bitcoin’s bull run, analyzing their technical foundations, market dynamics, and structural challenges. By understanding why some "Bitcoin-adjacent" assets struggle to capitalize on Bitcoin’s momentum, investors and enthusiasts can better assess long-term value drivers within the broader crypto landscape.
Understanding Bitcoin Cash (BCH)
Origins and Technical Vision
Bitcoin Cash (BCH) emerged in August 2017 as a hard fork of the original Bitcoin blockchain, driven by a faction advocating for larger block sizes to improve transaction throughput and reduce fees. Proponents argued that Bitcoin’s 1MB block limit was hindering its viability as peer-to-peer electronic cash. BCH increased the block size to 8MB (later expanded further), enabling faster and cheaper transactions.
Developed primarily by the Bitcoin ABC team, BCH aimed to fulfill what its supporters saw as Bitcoin’s original purpose: a decentralized, scalable payment network accessible to everyday users. It retained Bitcoin’s proof-of-work (PoW) consensus mechanism while enhancing script functionality to support basic smart contracts and token issuance through protocols like SLP (Simple Ledger Protocol).
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Market Performance in the 2024 Bull Cycle
During the early months of 2024, BCH experienced a short-lived surge alongside Bitcoin, peaking at around $700 in April. However, this high remains significantly below its previous all-time peak of $3,785 in 2017 and even short of its 2021 high near $1,500. As Bitcoin continued upward into late 2024, surpassing $100,000, BCH lagged behind, settling into a trading range between $400 and $450.
Unlike Bitcoin, which benefited from massive inflows via ETFs and institutional custody solutions, BCH lacked similar catalysts. Its correlation with Bitcoin’s price movements has weakened over time, indicating diminishing market interest despite shared fundamentals.
Why BCH Has Fallen Behind
Several interrelated factors explain BCH’s underperformance:
1. Limited Ecosystem Development
While Ethereum and later blockchains embraced Turing-complete smart contracts, BCH’s scripting language remains constrained. This limitation restricts the development of complex decentralized applications (dApps). The ecosystem is largely confined to simple use cases such as payments, data storage, and lightweight NFT or DEX platforms like CashTokens and Memo Cash.
In contrast, the rise of Bitcoin’s own Ordinals and BRC-20 protocols has drawn developer attention back to the main Bitcoin chain, leaving BCH’s SLP protocol relatively dormant. Without robust on-chain activity or innovative use cases, demand for holding or transacting in BCH remains subdued.
2. Lack of Institutional Interest
BCH’s status as a non-security (due to its lack of staking or yield-generating mechanisms) has shielded it from SEC scrutiny but also excluded it from mainstream financial inclusion. Unlike SOL or XRP, which gained momentum amid shifting U.S. regulatory expectations, BCH failed to capture institutional imagination. Only a handful of niche crypto funds include it in their portfolios.
Grayscale’s limited exposure to BCH—compared to its dominant GBTC fund—further underscores the lack of institutional confidence.
3. Decline of Key Influencers
Early champions like Roger Ver ("Bitcoin Jesus") and Wu Jihan once provided significant visibility and advocacy for BCH. However, Ver’s legal troubles and withdrawal from public discourse, coupled with Wu’s retreat from the crypto spotlight after internal conflicts at Bitmain, have left the project without strong leadership or marketing momentum.
Community cohesion has weakened as a result, contributing to declining hash rate participation and reduced on-chain transaction volume.
Exploring Fractal Bitcoin (FB)
A Native Bitcoin Scaling Solution
Fractal Bitcoin (FB), developed by the team behind Unisat Wallet—one of the most popular tools for interacting with Bitcoin’s Ordinals ecosystem—positions itself as a native Layer 2 scaling solution for Bitcoin. Unlike traditional sidechains or rollups built atop separate consensus layers, FB uses modified Bitcoin Core code and implements a “fractal” architecture that mirrors Bitcoin’s security model while enabling higher throughput.
Designed initially to alleviate congestion caused by BRC-20 trading during the 2023 inscriptions boom, FB supports merged mining with Bitcoin, allowing miners to secure both networks simultaneously without additional hardware costs.
Launch and Price Volatility
FB launched its mainnet on September 10, 2024, with its native token introduced shortly thereafter. Initial market sentiment was extremely bullish, driving prices up to $40 within weeks. However, enthusiasm quickly waned as user adoption failed to materialize. By early 2025, FB had plummeted to approximately $2—a drop of over 95%.
This dramatic reversal reflects not just speculative fatigue but deeper structural issues affecting new entrants in an increasingly competitive ecosystem.
Challenges Facing FB’s Adoption
1. Poor Timing and Fading Market Demand
FB was conceived during the height of the BRC-20 craze when gas fees on Bitcoin spiked due to inscription activity. Yet by the time FB went live, much of that speculative fervor had cooled. The successor protocol Runes failed to reignite widespread interest, leaving FB without a clear user base or urgent problem to solve.
As a result, even though technically sound, FB entered the market when demand for Bitcoin-layer innovations had already peaked.
2. Underdeveloped Ecosystem
Despite supporting more advanced applications than BCH, FB’s on-chain ecosystem remains sparse. Most existing projects are tied to legacy BRC-20 tools or explorers. Critical infrastructure such as decentralized exchanges (DEXs), lending protocols, or stablecoins—essential for sustainable growth—are still in early development stages.
Without compelling utility or real-world usage scenarios, traders see little reason to hold FB tokens beyond speculation.
3. Tokenomics-Driven Sell Pressure
FB’s token distribution exacerbates downward price pressure. Fifty percent of tokens are allocated to PoW mining rewards, with team and investor allocations locked. Consequently, circulating supply comes almost entirely from mining outputs and bootstrap program airdrops.
Because FB mining can run parallel to Bitcoin mining via merge-mining, large mining pools have directed substantial hash power toward FB—only to immediately sell mined tokens for profit. Combined with early adopters cashing out airdropped tokens, this constant sell-side pressure has overwhelmed buying interest.
Frequently Asked Questions (FAQ)
Q: Why hasn’t BCH risen with Bitcoin despite being a direct fork?
A: While BCH shares Bitcoin’s history and technology base, it lacks key growth drivers such as institutional investment, regulatory clarity, and a thriving dApp ecosystem. These factors have limited its ability to capture value during broader market rallies.
Q: Is Fractal Bitcoin a sidechain or Layer 2?
A: FB operates similarly to a sidechain but uses Bitcoin Core code and merge-mining for security alignment with Bitcoin. It's often classified as a native scaling solution rather than a traditional Layer 2.
Q: Can FB recover from its current price drop?
A: Recovery depends on ecosystem development. If developers build meaningful applications—especially those independent of fading trends like BRC-20—FB could regain relevance. However, sustained miner sell-offs remain a major hurdle.
Q: Does low correlation with Bitcoin mean these assets are bad investments?
A: Not necessarily. Lower correlation can offer portfolio diversification benefits. However, without strong fundamentals or adoption metrics, such assets may lack long-term appreciation potential.
Q: What makes a project part of the “Bitcoin ecosystem”?
A: Projects built on or extending Bitcoin’s functionality—through forks, layers, inscriptions, or tooling—are considered part of its ecosystem. True value comes not from association alone but from solving real problems for users.
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Final Thoughts: Value Must Be Earned
Bitcoin’s ascent into mainstream finance highlights a crucial truth: association does not guarantee success. Projects like BCH and FB benefit from proximity to Bitcoin’s brand and community but must deliver independent utility to thrive.
Market dynamics favor innovation, usability, and sustainable tokenomics—not nostalgia or technical similarity. As investors grow more discerning, only those ecosystems that deepen Bitcoin’s functionality while fostering genuine user engagement will endure.
The story of BCH and FB serves as a cautionary tale: being part of the Bitcoin narrative isn’t enough. True value is built—not inherited.
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