Cryptocurrency is valued primarily based on supply and demand, much like other commodities. The demand for a cryptocurrency determines how much that currency can be worth, while its availability (total supply) is also factored in to the value. For example, when demand for a cryptocurrency increases, its value appreciates, while if there is an oversupply, its value may depreciate. In addition, external factors such as inflation, economic stability, and governmental regulations can also influence the value of cryptocurrency.