What’s behind the booming market for rare coins

As investors continue to pour money into all things cryptocurrency, there is another type of currency that appears to be gaining momentum.

And this is as “real” as money – as in rare coins.

According to many accounts, the market for coins (or coins) has experienced exponential growth since the beginning of the pandemic, in terms of the number of sales and prices of items ordered. In fact, in 2021, a 1933 US Double Eagle gold coin, described as the “Holy Grail of coins,” sold for $18.9 million at Sotheby’s, where the auction house said the price nearly doubled the coin’s world record mark. one.

David Tripp, Sotheby’s private currency advisor, told MarketWatch that the sale of Double Eagle “appears to be a catalyst” for the industry.

“Since then, the achieved prices for high-quality rarities have been … at levels never seen before, or even dreamed of,” he said.

Private traders also reported that business was active. Brian Kendrella, president of Stack’s Bowers Galleries, one of the leading US dealers, says his sales are up 100% in 2021. He also says his company has been behind some significant sales in recent years, including $4 million plus one for US nickels. 1913 Liberty Head, another high value coin.

Kendrella said that interest in coins comes from everywhere, whether it’s from new collectors or “those who have been dormant and are rejoining the market.”

The ‘Holy Grail of Coins’: This 1933 American Double Eagle gold coin sold for a record $18.9 million at a Sotheby’s auction.

Courtesy of Sotheby’s and SquareMoose

There has also been an unexpected development of sorts in that those who have made fortunes from crypto are joining the coin bandwagon, says Mark Salzberg, president of the Numismatic Guaranty Company (NGC), a coin rating service.

“I don’t think they trust the stock,” Salzberg told MarketWatch.

Overall, the prices of the major exotic coins, according to a popular industry index created by Professional Coin Grading Services (PCGS), are up 16% since a year ago. Perhaps it is worth noting that the index has risen by 6,315% since its inception in 1970.

In a sense, the coin boom speaks of an all-out boom in collectibles since the start of the pandemic—a trend that includes everything from baseball cards and comic books to Barbies and Cabbage Patches.

Experts say the interest in all of these categories is driven by the fact that people have spent more time during the pandemic pursuing their interests — and in many cases, they have had more available income. At the same time, investors have been looking at tangible assets lately as an alternative to stocks and bonds – seen as more “real” in an often noisy and unpredictable financial world, not to mention the fact that they have attractiveness as an inflation hedge.

Why coins of all these assets? Those in the field point to the fact that coins have many advantages, starting with the fact that they are collectible many of us have known since our childhood days looking for old pennies or nickels as souvenirs.

The United States Mint began shipping out neighborhoods housing the poet Maya Angelou (bottom right). It is the first of five new American neighborhoods that celebrate American Women. Others will portray Wilma Mankiller, Nina Otero, Warren, Anna Mae Wong and Sally Ride.

Illustrative image of MarketWatch/US Mint

“The cash field has always been popular,” said Kevin Foley, CEO of the NY International Numismatic Convention, an annual event currently taking place in the city. In fact, the convention, which focuses largely on foreign exchange, commemorates its fiftieth anniversary, which in itself is a testament to the field’s continued attractiveness.

Another major advantage that coins offer is that they are often made of gold and silver – in fact closely related to precious metals, which are tangible assets that many people hold near and cherished. Or in other words: the paper on even the most valuable comic book is worth nothing, but gold or silver in coins always has an identifiable mixed value.

Kendrella also points out that coins are a relatively hassle-free asset for storage, especially compared to collectible cars or fine wines, for example. “You can keep it in a shoebox,” he said.

But what coins should you collect, especially if you are considering an investment strategy? Experts will note that the coin market is a vast market, with collectors specializing in any of several denominations. American coins are still the most popular, but there are also those looking for foreign coins — Foley said Chinese coins have become popular lately — as well as ancient coins. Newer versions, such as the gold and silver from the American mint, are also attractive.

“If you buy world currencies, you understand how civilization has developed.”

– Currency expert John Feigenbaum

At the moment, experts note, most categories are seeing a price hike. But some also warn that, as with the stock market, it’s hard to say whether growth will last forever. Luis Golino, a veteran observer of the coin market, noted that the 1980s saw a boom followed by a bankruptcy. “Things did not end well,” he wrote in a story for CoinWeek, an industry publication. Julino also cited examples of once hot coins that “sold at a fraction” of their previous prices.

Some suggest that there is a value to coin collecting beyond any potential financial gain.

John Feigenbaum, publisher of the Coin Dealer Newsletter, a well-known industry price guide, told MarketWatch that the hobby can teach us history and culture, especially since so many notable people — from presidents to poets — have appeared on coins.

“If you buy world currencies,” he said, “you understand how civilization developed.”