Coin collecting

This article is about a hobby. For the scientific study of currency, see Numismatics.

Coin collecting is the collecting of coins or other forms of minted legal tender.

Coins of interest to collectors often include those that circulated for only a brief time, coins with mint errors and especially beautiful or historically significant pieces. Coin collecting can be differentiated from numismatics, in that the latter is the systematic study of currency. Though closely related, the two disciplines are not necessarily the same. A numismatist may or may not be a coin collector, and vice versa.

A coin's grade is a main determinant of its value. For a tiered fee, a third party certification service like PCGS or NGC will grade, authenticate, attribute, and encapsulate most U.S. and foreign coins. Over 80 million coins have been certified by the four largest services.


People have hoarded coins for their bullion value for as long as coins have been minted.[1] However, the collection of coins for their artistic value was a later development. Evidence from the archaeological and historical record of Ancient Rome and medieval Mesopotamia[2] indicates that coins were collected and catalogued by scholars and state treasuries. It also seems probable that individual citizens collected old, exotic or commemorative coins as an affordable, portable form of art.[3] According to Suetonius in his De vita Caesarum (The Lives of the Twelve Caesars), written in the first century CE, the emperor Augustus sometimes presented old and exotic coins to friends and courtiers during festivals and other special occasions.[4]

Contemporary coin collecting and appreciation began around the fourteenth century. During the Renaissance, it became a fad among some members of the privileged classes, especially kings and queens. The Italian scholar and poet Petrarch is credited with being the pursuit's first and most famous aficionado. Following his lead, many European kings, princes, and other nobility kept collections of ancient coins. Some notable collectors were Pope Boniface VIII, Emperor Maximilian I of the Holy Roman Empire, Louis XIV of France, Ferdinand I, Henry IV of France and Elector Joachim II of Brandenburg, who started the Berlin Coin Cabinet (German: Münzkabinett Berlin). Perhaps because only the very wealthy could afford the pursuit, in Renaissance times coin collecting became known as the "Hobby of Kings."[5][6][7]

During the 17th and 18th centuries coin collecting remained a pursuit of the well-to-do. But rational, Enlightenment thinking led to a more systematic approach to accumulation and study. Numismatics as an academic discipline emerged in these centuries at the same time as coin collecting became a leisure pursuit of a growing middle class, eager to prove their wealth and sophistication. During the 19th and 20th centuries, coin collecting increased further in popularity. The market for coins expanded to include not only antique coins, but foreign or otherwise exotic currency. Coin shows, trade associations, and regulatory bodies emerged during these decades.[3] The first international convention for coin collectors was held 1518 August 1962, in Detroit, Michigan, and was sponsored by the American Numismatic Association and the Royal Canadian Numismatic Association. Attendance was estimated at 40,000.[5] As one of the oldest and most popular world pastimes, coin collecting is now often referred to as the "King of Hobbies".[8][9]


Two 20 kr gold coins from the Scandinavian Monetary Union.

The motivations for collecting are varied. Possibly the most common type of collector is the hobbyist, who amasses a collection purely for fun with no real expectation of profit. This is especially true of casual collectors and children who collect items on the basis of chance and personal interest.

Another frequent reason for purchasing coins is as an investment. As with stamps, precious metals or other commodities, coin prices are cyclical based on supply and demand. Prices drop for coins that are not in long-term demand, and increase along with a coin's perceived or intrinsic value. Investors buy with the expectation that the value of their purchase will increase over the long term. As with all types of investment, the principle of caveat emptor applies and study is recommended before buying. Likewise, as with most collectibles, a coin collection does not produce income until it is sold, and may even incur costs (for example, the cost of safe deposit box storage) in the interim.[10]

Coin hoarders may be similar to investors in the sense that they accumulate coins for potential long-term profit. However, unlike investors, they typically do not take into account aesthetic considerations; rather they gather whatever quantity of coins they can and hold them. This is most common with coins whose metal value exceeds their spending value.[11]

Speculators, be they amateurs or commercial buyers, generally purchase coins in bulk and often act with the expectation of short-term profit. They may wish to take advantage of a spike in demand for a particular coin (for example, during the annual release of Canadian numismatic collectibles from the Royal Canadian Mint). The speculator might hope to buy the coin in large lots and sell at profit within weeks or months.[10] Speculators may also buy common circulation coins for their intrinsic metal value. Coins without collectible value may be melted down or distributed as bullion for commercial purposes. Typically they purchase coins that are composed of rare or precious metals, or coins that have a high purity of a specific metal.[12]

A final type of collector is the inheritor, an accidental collector who acquires coins (a collection, hoard or investment) from another person as part of an inheritance. The inheritor may not necessarily have an interest in or know anything about numismatics at the time of the acquisition.[12]

Collector types

Casual coin collectors often begin the hobby by saving notable coins found by chance. These coins may be pocket change left from an international trip or an old coin found in circulation.

Usually, if the enthusiasm of the novice increases over time, random coins found in circulation are not enough to satisfy their interest. The hobbyist may then trade coins in a coin club or buy coins from dealers or mints. Their collection then takes on a more specific focus.

Some enthusiasts become generalists and accumulate a few examples from a broad variety of historical or geographically significant coins. Given enough resources, this can result in a vast collection. King Farouk of Egypt was a generalist with a collection famous for its scope and variety.[13]

Most collectors decide to focus their financial resources on a narrower, specialist interest. Some collectors focus on coins of a certain nation or historic period. Some collect coins by themes (or 'subjects') that are featured on the artwork displayed on the coin.[14] Others will seek error coins. Still others might focus on exonumia such as medals, tokens or challenge coins. Some collectors are completists and seek an example of every type of coin within a certain category. Perhaps the most famous of these is Louis Eliasberg, the only collector thus far to assemble a complete set of known coins of the United States.

Coin collecting can become a competitive activity, as prompted by the recent emergence of PCGS (Professional Coin Grading Service) and NGC (Numismatic Guarantee Corporation) Registry Sets. Registry Sets are private collections of coins verified for ownership and quality by numismatic grading services. The grading services assess collections, seal the coins in clear plastic holders, then register and publish the results. This can lead to very high prices as dedicated collectors compete for the very best specimens of, for example, each date and mint mark combination.[15][16]

Common themes

Some coins of Ceylon
Coins featuring eagles

A few common themes are often combined into a collection goal:

A false 20 Lira coin, 1927. With the head of Benito Mussolini on the obverse, this is an obvious copy. Italian coins during the fascist period bore the portrait of King Victor Emmanuel III.[25][26]

Collecting counterfeits and forgeries is a controversial area because of the possibility that counterfeits might someday reenter the coin market as authentic coins, but US statutory and case law do not explicitly prohibit possession of counterfeit coins.[23]

These sorts of collections are not enjoyed by mainstream collectors and traditional collectors, even though they themselves may have in the past or continue to have pieces which could be considered part of an aesthetic collection. One of the issues with this category is that the coins can be seen to have less perceived value to speculators and appraisers. Secondly the coins may be produced artificially, that is coins can be exposed to substances which can create effects similar to those sought for aesthetic collections. This means that coins which may be worth more to historians, numismatists and collectors for their purposes will be destroyed by the process.

Grade and value

In coin collecting, the condition of a coin (its grade) is paramount to its value; a high-quality example is often worth many times more than a poor example. Collectors have created systems to describe the overall condition of coins.

In the early days of coin collecting—before the development of a large international coin market—extremely precise grades were not needed. Coins were described using only three adjectives: "good," "fine" or "uncirculated". By the mid 20th century, with the growing market for rare coins, the American Numismatic Association helps identify most coins in North America. It uses a 170 numbering scale, where 70 represents a perfect specimen and 1 represents a barely identifiable coin. Descriptions and numeric grades for coins (from highest to lowest) is as follows:[32][33][34]

This Deutsche Mark coin shows blemishes and rim dents that would detract from its grade in appraisal. 3D red cyan glasses are recommended to view this image correctly.

In addition to the rating of coins by their wear, Proof coinage occurs as a separate category. These are specimens struck from polished dies and are often packaged and sold by mints. This is frequently done for Commemorative coins, though annual proof sets of circulating coinage may be issued as well. Unless mishandled, they will stay in Mint State. Collectors often desire both the proof and regular ("business strike") issues of a coin, though the difference in price between the two may be significant. Additionally, proof coins follow the same 1-70 grading scale as business strike coins, though they use the PR or PF prefix.

Coin experts in Europe and elsewhere often shun the numerical system, preferring to rate specimens on a purely descriptive, or adjectival, scale. Nevertheless, most grading systems use similar terminology and values and remain mutually intelligible.[35][36][37]

An early PCGS slab.

When evaluating a coin, the following—often subjective—factors may be considered:

  1. "eye appeal" or the aesthetic interest of the coin;
  2. dents on the rim;
  3. unsightly scratches or other blemishes on the surface of the coin;
  4. luster;
  5. toning;
  6. level of detail retained, where a coin with full details obviously is valued higher than one with worn details. If the coin is judged favorably in all of these criteria, it will generally be awarded a higher grade.[32]

Damage of any sort (e.g., holes, edge dents, repairs, cleaning, re-engraving or gouges) can substantially reduce the value of a coin. Specimens are occasionally cleaned or polished in an attempt to pass them off as higher grades or as uncirculated strikes. Because of the substantially lower prices for cleaned or damaged coins, some enthusiasts specialize in their collection.[38]

Certification services

Third-party grading (TPG), aka coin certification services, emerged in the 1980s with the goals of standardizing grading, exposing alterations, and eliminating counterfeits. For tiered fees, certification services grade, authenticate, attribute, and encapsulate coins in clear, plastic holders.[39][40][41] There are four coin certification services which eBay, the largest coin marketplace, deems acceptable to include in its listings: Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation (NGC), Independent Coin Graders (ICG), and ANACS. Experts consider these to be the most credible and popular services. Together they have certified over 80 million coins.[42][43][44][45][46][47]

In 2007, the rare coin industry's leading dealer association, the Professional Numismatists Guild (PNG), released the results of a survey of major coin dealers who gave their professional opinions about 11 certification services. PCGS and NGC were rated "Superior" overall, with ANACS and ICG deemed "Good". PCI and SEGS were listed as "Poor", while called "Unacceptable" were Accugrade (ACG), Numistrust Corporation (NTC), Hallmark Coin Grading Service (HCGS), American Coin Club Grading Service (ACCGS), and Star Grading Services (SGS).[44][45][48]

Certified Acceptance Corporation (CAC) is a Far Hills, New Jersey coin certification company started in 2007 by coin dealer John Albanese. The firm evaluates most numismatically valuable U.S. coins already certified by NGC or PCGS. Coins which CAC deems high-end for their grades receive green stickers. Coins which are at least high end for the next grade up are bestowed gold stickers. CAC-certified coins usually trade for a premium. CAC buys and sells CAC-certified coins via their affiliated trading network, Coinplex.[49][50][51][52]

Coin certification has greatly reduced the number of counterfeits and grossly overgraded coins, and improved buyer confidence. Certification services can sometimes be controversial because grading is subjective; coins may be graded differently by different services or even upon resubmission to the same service. The numeric grade alone does not represent all of a coin's characteristics, such as toning, strike, brightness, color, luster, and attractiveness. Due to potentially large differences in value over slight differences in a coin's condition, some submitters will repeatedly resubmit a coin to a grading service in the hope of receiving a higher grade. Because fees are charged for certification, submitters must funnel money away from purchasing additional coins.[44][45][53][54][55]

See also

Wikimedia Commons has media related to Coins.



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