Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News. Read more opinion SHARE THIS ARTICLE Share Tweet Post Email

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There are now four times as many cryptocurrencies in circulation as fiat currencies.

That's amazing. And encouraging.

According to the Swiss Association for Standardization, which maintains the International Standards Organization database, there are 177 national currencies currently in use. That list generously includes four precious-metals and four bond-market units (codes XBA to XBD, for the curious).

Number of digital currencies 753

The CoinMarketCap website lists 753 cryptocurrencies, all the way from Bitcoin and Ethereum down to StrongHands and Paccoin (current value: $0.00000014).

With a retired basketball star promoting one such incarnation -- tied to marijuana -- on a recent trip to a repressive Asian nation lying to the north of South Korea, I'm tempted to call Peak Crypto.

But let's not kid ourselves: The madness is far from over. Bitcoin skeptics have been eating their words ever since the leading digital currency reached $1,000. January seems like such a long time ago now that Bitcoin is trading above $2,700.

Bruised Bears Betting against Bitcoin when it reached $1,000 would have been a costly mistake Source: Bloomberg

Although Bitcoin has climbed 300 percent in the past 12 months, giving its "coins" in circulation a value of $45 billion, Satoshi Nakamoto's brainchild is actually declining in relative importance. From more than 95 percent in late 2013, Bitcoin now accounts for 39 percent of the value of all cryptocurrency in circulation. Ethereum has caught up fast, from 3.9 percent at the start of the year to 31 percent of the total now, according to CoinMarketCap. Ripple is in third place at around 8.8 percent after briefly overtaking Ethereum last month.

Virtual Value Bitcoins in circulation are now worth more than $45 billion with Ethereum close behind Source: CoinMarketCap

The other 20 percent of cryptocurrency value is unevenly distributed among the 750 wannabes along a very long tail. It's possible some will rise to a level of legitimacy that will make them viable in the long term. Many are betting not on mass uptake but on niche acceptance -- one pitches itself as the payments platform for online games; another limits the amount of coins to the number of kilometers between Earth and its moon; one seeks to be the official currency of a fictitious nation.

Market Force Bitcoin remains the world's biggest cryptocurrency, but its dominance has waned Source: CoinMarketCap

Yet Bitcoin itself remains so niche that the WannaCry hackers reaped a minuscule harvest after infecting more than 200,000 computers, because they insisted on being paid in the cryptocurrency.

Just because the boom is ridiculous doesn't mean it lacks momentum -- it just tells you that consolidation also is inevitable. Not in the traditional M&A sense, but in the way that messenger apps like AIM, ICQ, Yahoo and MSN quietly gave way to WhatsApp and WeChat, which then led to the ubiquity of instant-messaging technology.

Morgan Stanley posited last week that government acceptance will be key to Bitcoin's continued rise, with the flipside being some kind of regulation of the currency. That's probably right, and if proponents of cryptocurrencies think they'll achieve widespread uptake without a nod from the authorities, they're probably smoking something.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:

Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story:

Paul Sillitoe at psillitoe@bloomberg.net