As investors continue to pour money into all things crypto, there is another type of currency that seems to be gaining traction.
And this one is as “real” as silver is – as in rare coins.
In many ways, the coin (or numismatic) market has seen phenomenal growth since the start of the pandemic, both in terms of the number of sales and the price of sought-after items. Indeed, in 2021, a 1933 American Double Eagle gold coin, billed as the “holy grail of coins”, sold for $18.9 million at Sotheby’s, with the auction house saying the price was nearly doubled the world record for a coin.
David Tripp, coin consultant at Sotheby’s, told MarketWatch that the sale of Double Eagle “seems to have acted as a catalyst” for the industry.
“Since then, prices realized for high-quality rarities … have reached heights never seen before, or even dreamed of,” he said.
Private dealers also report that business has been buoyant. Brian Kendrella, president of Stack’s Bowers Galleries, one of the largest retailers in the United States, says his sales jumped 100% in 2021. He also says his company has been driving significant sales these years, including more than $4 million. one for a 1913 American Liberty Head nickel, another highly prized coin.
Kendrella said interest in the coins came from all over, from new collectors to those “who were dormant and joining the market”.
Mark Salzberg, president of Numismatic Guaranty Company (NGC), a coin grading service, says there has also been something of an unexpected twist as those who have made their fortunes from cryptocurrency are joining the train moving.
“I don’t think they trust stocks,” Salzberg told MarketWatch.
Overall, prices for major rare coins, as tracked by a popular industry index created by Professional Coin Grading Services (PCGS), are up 16% year over year. Perhaps most remarkably, the index has risen 6,315% since its inception in 1970.
In a sense, the coin boom signals an overall boom in collectibles since the pandemic began — and it’s a trend that incorporates everything from baseball cards and comic books to Barbie and Cabbage dolls. patch.
Experts say interest in all of these categories is driven by the fact that people have had more time during the pandemic to pursue their collecting interests – and in many cases have had more disposable income. At the same time, investors have recently viewed tangible assets as an alternative to stocks and bonds – they are seen as more “real” in an often troublesome and unpredictable financial world, not to mention attractive as as hedging against inflation.
Why parts of all these assets? Those in the field point out that coins have several advantages, starting with the fact that they are a collector’s item that many of us have been familiar with since childhood looking for coins or coins. older nickels as souvenirs.
“The field of numismatics has been popular for a long time,” said Kevin Foley, an executive at the NY International Numismatic Convention, an annual event currently taking place in the city. In fact, the convention, which has a heavy focus on foreign plays, is celebrating its 50th anniversary, itself proof of the field’s continued appeal.
Another key benefit of coins is that they are often made from gold and silver – indeed, they are intrinsically linked to precious metals, the tangible assets that many people hold nearby. Or in other words: the paper that goes into the most valuable comics is worth nothing, but the gold or silver in the coins still has a definable melting value.
Kendrella also points out that coins are a relatively simple asset to store, especially compared to, say, vintage cars or fine wines. “You can keep them in a shoebox,” he said.
But which coins should you collect, especially if you’re thinking in terms of investment strategy? Experts will note that the numismatic market is large, with collectors specializing in one of several categories. American coins remain the most popular, but there are also those looking for foreign coins – Foley said Chinese coins have become popular lately – and also old coins. Newer issues, such as those in gold and silver from the U.S. Mint, are also attractive.
““If you buy world coins, you understand how civilization developed.””
Right now, most categories are seeing price increases, experts note. But some also warn that, much like the stock market, it’s hard to say whether growth will continue indefinitely. Louis Golino, a seasoned observer of the coin market, pointed out that the 1980s saw a boom followed by a bust. “Things didn’t end well,” he wrote in an article for CoinWeek, an industry publication. Golino also cited examples of once-hot pieces that are now “selling for a fraction” of their old prices.
Some suggest there is value in collecting coins that goes beyond any potential financial gain.
John Feigenbaum, publisher of Coin Dealer Newsletter, a well-known industry price guide, told MarketWatch that the hobby can teach us about history and culture, especially since so many eminent people – from presidents to poets – appeared on coins.
“If you buy world coins, you understand how civilization developed,” he said.