My Thoughts On The Current State Of The Numismatics Market

April 19, 2019

Ongoing readers of this column will note that I have not been too kind in regard to my opinions on the current state of the numismatics marketplace. Outside of my views on mass speculation occurring in the pop culture realm of the modern collectibles marketplace, my commentary on the current state of coin and paper money collecting generates the most feedback from regular readers. I stand behind all of the viewpoints I present in each and every column and always attempt to write from a perspective that is devoid of any emotional attachment or bias to the topic in question. I also tend to write only about topics about I am passionate, making this no easy task. That said, as a hardcore collector, enthusiast, and investor in classic and antique U.S. coins and currency, it is my personal opinion that the current numismatics market is in a state of transition.
This should not be intepreted that coin or paper money collecting is dead or dying, but there are some vast changes taking place that need to be addressed. There have been numerous articles written within the past two years regarding the decline in the overall numismatics market by experts in the trade, which can easily be accessed via any internet search. Most of this data is unbiased, as a lot of it has been published by some of the leading numismatic collecting websites. Current estimates from the Professional Numismatics Guild, or PNG, place the current size of the yearly numismatics market at anywhere from $3.5 to $4 billion, depending on how we are calculating the total. This total excludes modern coins sold by the U.S. Mint and bullion coins being bought solely for their precious metal content. All in all, the demand for collectible coins and paper money is huge, and I don’t see that number dropping dramatically anytime soon, but what is increasing is the value of coins and currency valued at $50,000 or more. It is this development that is leaving anyone but the wealthiest numismatic collectors out in the proverbial cold. This is why one cannot just look at auction totals and judge the overall health of the total numismatics market based solely on the results of several highly coveted coins that broke new price records.
Another trend that seems to be developing in the collectible coin market is the fact that coins valued at $500 or below across all condition grades are actually selling quite well. The reason for this is twofold. Collectors in this category of the market tend to be precious metal investors as well as hardcore numismatists. Popular in this category are mid-grade and uncirculated common to semi-key date Morgan Dollars, Peace Dollars, and Walking Liberty Half Dollars. An example of a semi-key coin that is quite sought after in this sector of the market is the 1921 Peace Dollar in all grades up to uncirculated. This coin can be graded by a leading third-party grading company for around $425 in the bottom tier of the mint state grading category.
Another reason collectors are drawn to coins valued at $500 or less is because this area of the market is quite affordable. A lot of semi-key coins can be had for a relatively low cost depending on the quality and condition the collector is willing to accept, and a fairly historic collection can be assembled by the average numismatist at this level. Unfortunately, and it should be noted (pun intended), that paper money in the $500 or lower category isn’t accelerating in value. This helps prove the theory that a lot of the coin buyers and collectors in the $500 or lower tier of the market are somewhat influenced by precious metal prices.
Not surprisingly, the overall market for items in the $1,000 to $10,000 tier has remained flat over the past couple of years. This trend cannot solely be blamed on the aftermath of the 2009 financial crisis. Younger generations just do not have the money or the interest to play in this area of the market, and older collectors who were able to amass sizeable and important numismatic collections decades earlier at a much lower cost are now selling into this sector of the market. This is creating a higher than normal supply of exceptional high-grade coins with not enough buyers to sell them to. This in turn is creating a buyer’s market with a lot of interest only in the most accurately graded items with good eye appeal. Everything else is lukewarm. It is not uncommon to scroll the auction listings of well-touted sales from Heritage Auctions or Stacks & Bowers and see row after row of identically graded coins with exceptional prices being achieved on coins that show extremely good eye appeal. In the graded paper money marketplace, deals can be had on almost all but the rarest issues and grades. As a result, I do not see much upside potential in this area of the market for quite some time.
A question I am often asked is if I am adding to my current numismatic holdings at present time. The answer is a resounding yes, and I do believe in the future of numismatics. That said, what collectors need to realize is that in order for a turnaround in the market to occur, the amount of high quality material needs to find its way into long-term collectors’ hands. Once the older generations are finished liquidating their collections, this is most likely to occur, but you have, in my opinion, about a 7- to 10-year wait for that occur. This time period will also give the younger generations time to enter their peak earning years with the necessary funds to buy these kinds of high quality coins. For the record, I advise collectors focused on accumulating numismatic material that has the potential to appreciate to go after items graded MS-65 or higher with good eye appeal. In an upcoming article I will provide my top tips for collecting and investing in numismatics that have served me well over the years. One segment of the market that should be explored should the beginning or experienced collector wish to invest is the market for sought-after third-party-graded paper money. Uncommon and historic issues like pre-1900 silver and gold certificates appear to be undervalued at present time when compared to their silver and gold coin counterparts. However, caution and patience needs to be applied to this strategy, as there is a distinct possibility that this segment of the market remains flat for some time.
In conclusion, out of all the collecting categories I write about on a regular basis, the hobby of numismatics is and always will be actively pursued by collectors. There is no other hobby that tells the unique and varied history of a civilization’s economic and culture quite like numismatics; and as long as they continue to teach both finance and history in school, new numismatists will continue to be minted each and every year.

Shawn Surmick has been an avid collector since the age of 12. He currently resides in his hometown of Boyertown, Pa., and is a passionate collector of antiques and collectibles. His articles focus on various topics affecting the marketplace.


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