The relationship between ATBs (All-Terrain Bikes) and BMX is quite interesting and rooted in the evolution of cycling culture. While ATBs weren't a direct development of BMX, they were certainly influenced by BMX innovations.
Growing up in San Rafael, I noticed that BMX didn't gain the same traction in Marin County as it did in other parts of California. Today, the trend among teenagers here, in Marin, leans towards e-bikes with fat tires, some of which may even lack traditional pedals. In contrast, neighboring counties are seeing a resurgence in BMX cruisers. This difference highlights how cultural, economic, and geographical factors can shape local biking trends.
In the late '70s, Gary Fisher, who was a bicycle mechanic at a shop near my home, was instrumental in this evolution. By the time I was 14 in 1979, I was finally tall enough to ride 26" balloon tire bikes. When Fisher and Charlie Kelly founded MountainBikes, I spent a lot of time at their shop and went on their group rides.
Early mountain biking represented a blend of prewar American balloon tire bikes and '70s road bikes, with BMX playing a significant role. BMX's influence was evident in the development of off-road biking components: BMX prompted companies like Araya and Ukai to produce aluminum rims, while IRC and Cyclepro began manufacturing off-road tires. This cross-pollination of ideas helped shape the emergence of ATBs, blending various biking traditions into what we now recognize as mountain bikes.
Here is a picture of me, taken by Frank Berto, author of the Dancing Chain, on my Ritchey at the second to last, I think...Repack race. I think this picture helps answer the question.