Rare coins in New York, smiling sellers show their precious goods, neatly exhibited in glass cabinets, windows.
For an inexperienced person, all this looks like an unnecessary pocket change to anyone. Numismatists studying the history and art of old money see aesthetic masterpieces in well-preserved coins, which cost many times more than their nominal price.
At an auction organized by Stack’s Bowers on March 31, the American cent sold in 1793 for $ 940 thousand was the most expensive small coin in the history of numismatics.
The index of tangible alternative asset categories (index of tangible alternative asset classes), compiled by consulting firm Knight Frank, shows that income for rare coins for the ten-year period at the end of 2016 was 195%, higher than art (139%), postage stamps ( 133%), furniture (-31%) and the S & P 500 (58%).
Coins are easier to transport than paintings or furniture, and they have a higher price-to-volume ratio. Postage stamps may be even lighter, but the paper on which they are printed is more fragile than metal, notes The Economist in the UK.
However, the market of rare coins has long had an unimportant reputation. What makes the coin very valuable – brilliance, clarity of detail, tone and wear, is elusive for the unprepared eye.
That is why the dubious coin traders have for many years successfinvestmentully persuaded investors to pay huge money for not very valuable or even fake coins.
The Wild West market ended in 1986, when the first independent coin certifier appeared, based in California: Professional Coin Grading Service (PCGS). Assigning a place to each coin in the 70-level scale, PCGS gave the market transparency, sharply increased investor confidence and sales.
Today, global sales of rare coins are estimated at $ 5-8 billion a year, and 85% of the market is in America. About how important independent valuation has become is the fact that all rare coins sold today at auctions are evaluated by PCGS or its main competitor, the Numismatic Coin Valuation Corporation (NGC), which is based in Florida.
Some explain transcendental income with the existing rating scale. Investors are strictly adhering to the assigned level: even a one-step increase can double or even triple the retail value of a coin.
So, for example, a silver dollar printed by the San Francisco Mint in 1884, is sold at $ 19,500 with level №62, but soars in price up to $ 65 thousand from №63.
The assignment of a level is subjective: one of the evaluation criteria is “external attractiveness”. Scott Travers, a coin trader in New York, says that investors sometimes give the same coin to the mark 10 or 20 times in the hope of increasing the level. All this leads to a gradual “step inflation”.
In the long run, a steady increase in the number of coins with the highest possible level only due to the decision of the appraiser will undoubtedly lead to a fall in prices.
A new service has already appeared – “appraiser of appraisers”, which monitors compliance with the rules when assigning a level in two main appraisal companies. Should we expect in the near future an appraiser who will monitor the appraiser appraisers?