Why would someone collect coins (Numismatics), especially gold and silver coins? Most of us know that coins can increase in value over time but most do not know the value increase factor(s). We depend on Numismatists (coin specialists) to tell us a coin’s worth. How does a coin with a currency value of one dollar (or four sheep) end up selling for over $3 million?
Humans love tokens. The pictures we take of our family, the arts and crafts we value and collect, trophies to remind us of our victories, clothing articles we cannot part with are all items we keep as reminders of another time. In many instances when a person’s home was lost, they mourned the irreplaceable family pictures and other items worth far more, to them, than the monetary value of the house itself. We treasure these tokens until they deteriorate with the passing years and are deemed worthless. We can assume that is why marble, bronze, silver and gold are the choices for precious art especially if they are meant to capture memories and honor famous people or events. Witness the museums harboring the tokens that represent an entire civilization, thriving long before we were born.
Shiny, sparkling, aesthetic gold and silver is desirable in any form though silver is the more practical metal of the two. Most people think that the metal content is the determining factor in a coin’s value. If their estimation of these two factors is correct, then the oldest gold and/or silver coin would be the most valuable, right? Let’s see if that works out.
The Lydian Lion trite has been called the “first coin.” Minted from a gold and silver combination called electrum or “white gold,” its obverse is a lion’s head and the reverse bears a variety of marks. This Kingdom of Lydia “coinage” (650BC to 561BC) auctions in present day from around $350 to $2,500 despite it being over 2000 years old. Its worth during its time is argued at anywhere from one to eleven sheep. If its worth was indeed eleven sheep during its time, its value has not increased much beyond inflation since eleven sheep would cost you from $550 to $1,100 today.
Let’s be thorough and not jump to conclusions. Possibly a reason for the low value of the Lydian trite is due to the fact that it has not been proven to be an official coin. According to Webster, Second Edition, a coin is: “A piece of metal (or, rarely, of some other material) certified by a mark or marks upon it to be of a definite exchange value and issued by governmental authority to be used as money.” The Lydian “coin” lacks any evidence of being issued by a governmental authority with a definite exchange value. Additionally, it was rarely found outside of its own kingdom, thereby leaving us with insufficient proof that it was used as currency. The reverse marks on a Lydian trite vary in design and number. Some may have been made simply to hold the metal in place while the lion’s head was being pressed. Others are more complex but their significance was lost with time.
Following this line of thought, the Greek coins and others throughout Asia Minor and China would be the next oldest, dating around the same time period of 5th Century BC. However, despite their metal content, extreme age and the fact that they are tokens of a long gone age for an ancient civilization, these coins are not at the top of an auctioneer’s price list. One may dream of finding a treasure chest full of doubloons buried centuries ago by a famous pirate. And, perhaps, if they were pure gold, it may in its abundance, truly be a treasure.
Though we may gaze upon ancient coins with wonder and imaginings of those who held them so long ago, Greek, Chinese and Asian coins (the earliest validated coins) are being sold as entire collections for only a few thousand dollars. A Spanish doubloon in excellent shape might fetch $4,000. Absence, apparently, only makes the heart grow fonder until the absence has lasted beyond the point where it matters. The more distant the history does not equate to rarity or personal appeal on the auction floor.
Realizing by now that Numismatists, coin collecting experts, are not archaeologists, we can check the sales history of a few auction houses and see what did sell well. We have heard about coins that have sold for a million dollars, is it true? Checking the Heritage Auction Galleries, we find a “Hall of Fame” and two coins that sold for $3.7 million — the Class I 1804 American silver dollar and the 1913 Five Cent Liberty. Why would recent history have so much more value to a Numisimatist than ancient history? Does this mean that the Kingdom of Lydia, the hay day of Greece or China has no special memories for us?
Let’s fall back on a law we know to be true in marketing: supply and demand. Hypothesizing that the value of the coin is not established by its age but rather by its rarity and appeal to the affinities of the coin collector, the history of the coin or its “story” would most affect its selling price. Following this line of research we find the presentation below the coin. Written there is an entire history of the coin including its owners, how much each paid for it, the fact that there are only eight known to be in existence, two of which are in institutions and the grading done by a respectable Numismatics firm. Only six Numismatists own this coin (supply and demand). Having this coin in your collection would practically immortalize you as a Numismatist.
From this we can hypothesize that a coin’s rarity, history, sentimental appeal and numismatic prestige have a lot to do with the price it will fetch on the market. Looking into this further proves out the theory. The 1913 Five Cent Liberty has a similar documentation and sold at $3.7 million. Of course, there are always exceptions to the rule. It is important to know the highest content of pure gold or silver in your coin and the highest grade possible for your type of coin.
This particular article, however, was to clarify that the value of coins is not based on its age. If you are selling coins on auction sites, you will want to certify as much information as you can and display it along with your coins.
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Thank you, I have recently been searching for information about this topic for ages and yours is the best I have discovered so far.
Thank you. I'm glad I could help. Let me know what topics you would like more information on and I'll try to get an article or blog posted for you.
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