As the overall cryptocurrency market cap has continued to rise over the last several years, another “coin” market has begun to creep into the spotlight – rare coins.
The numismatic market has experienced tremendous growth since the beginning of the pandemic in both sales volume and prices. For example, a highly sought-after 1933 Double Eagle gold coin recently sold at a Sotheby’s auction for $18.9 million USD, shattering the previous record for most expensive coin sale by almost double.
Even private dealers have reported an uptick in business. President of Stack’s Bowers Galleries, Brian Kendrella, says his sales have increased by 100% over 2021. His company has been involved in some significant sales over the last several years, including a 1913 Liberty Head nickel that fetched a value of over $4 million USD.
Kendrella noted that demand for coins is coming from every direction, whether it be new collectors or former collectors re-entering the market.
In an unexpected twist, it seems that those that accumulated massive fortunes in the cryptocurrency space are also entering the numismatic market. Mark Salzberg, chairman of coin grading company NGC, feels that the demand from the cryptocurrency market is likely due to the fact these investors don’t trust the stock market.
According to metrics from an industry index by PCGS, overall prices of key rare coins have risen 16% over the last year. In comparison, according to data from OKX, Bitcoin is down about 13% during the same timeframe.
The growth is mirrored by that in other collectibles markets, from Pokemon cards to comic books – all corners of the collectibles market have spiked since the start of the pandemic, which experts attribute largely to increased amounts of free time and stimulus money. Most asset categories are currently experiencing rises in prices, though experts caution that the growth may not continue forever.
Why coins? Besides the appeal of being something that many collected as children, experts often point to the fact that investors are turning to more “real”, tangible assets over potentially manipulated financial instruments such as stocks and bonds. Further, they are often viewed as an effective hedge against inflation, which is a growing concern in today’s economy.
Another benefit is the fact that many coins are made from precious metals, such as gold and silver, effectively tying their value closely to the spot metals value of the coin itself. Unlike assets that are priced based more upon sentimental value, such as comic books, many coins will always have a defined melt value.
Coins are also a much simpler asset to store than other types of collectibles, such as fine wines or vintage automobiles, which often require careful or costly storage. Coins can be stored for decades in a shoebox without much concern of them degrading over time.
Others suggest that the value of collecting coins goes further than potential financial gain by providing collectors with insights on history and culture, as presidents and historical figures frequently appear on coins. John Feigenbaum, publisher of Coin Dealer Newsletter, said, “If you buy world coins, you understand how civilization developed.”
