Activity Across the Market (August 2021 Greysheet)

While the significant changes that are happening in the collectibles industry are making the headlines, the rare coin market itself seems to be regulating. By that I mean most market participants have adjusted to the current reality that levels are higher, inventory is more scarce than before, and premiums are higher. I do not really like the phrase “New Normal” because our world, specifically from a financial and monetary policy perspective, is anything but. What happens over the course of the next three months will be very influential on the direction of the coin market. This has the potential to leave dealers and collectors in a precarious position. Although the bull market in rare coins and bullion is barely a year old, the overriding problem with all financial markets over the past two decades has been that asset bubbles inflate and deflate with increasing speed. This has been marked, on one hand, by huge numbers of new participants entering a market for the first time, usually vastly undereducated about the underlying asset or how it functions. From “house flipping” to crypto currency, to day trading—from the eTrade days all the way to Robinhood—and now to collectibles, large numbers of people jumped in hoping to make money and not miss the train. On the other hand, early adopters and those who exited the market or their position early did quite well. In observing the rare coin market in the present, one can find some head-scratching results. Were some coins, or groups of coins, undervalued and needed to come up in price? Absolutely. There are quite a few more that still appear to be undervalued relative to their rarity. But we all should ask ourselves, while the market is positive and yielding great results, why we chose to be here. I’d like to emphasize that this is not a negative thought or exercise. Rather, it hopefully serves to remind us that markets will always go up and come down, and to not get caught up in hysteria. The majority of us are very thankful to be involved in this hobby especially during this exciting time. But perspective is valuable.

Other than the 1933 Saint Gaudens, the top selling U.S. coin auction lot in June was this beautiful 1795 Flowing Hair $1 graded PCGS MS65 at Heritage Auctions for $600,000.

And this brings me back to perhaps the greatest truth about our rare coin market, that is at its core it is a hobby; something done from passion, intellectual curiosity and a sense of history. Large entities can move to financialize and commoditize collectibles, but the ones who will reap the most joy, tangibly and intangibly, are the true collectors who build a collection over time with an end goal in mind, and simply because they enjoy the objects they collect.