What makes a coin valuable?
There are a number of things that contribute to a coin’s price on the open market. Mintage, Rarity, Grade, Composition and Appeal. Allow me to explain my understanding of these qualities to you.
Mintage is the amount of coins that has been determined to exist. That number is different from population. A population is the amount of a particular coin that has been minted. For example, there may be a mintage of a coin that is 5,000 but they have only made 500. The mint could later make 4500 more coins to complete the rest of the mintage.
Rarity is how difficult it is to find a particular coin. Mintage has a lot to do with rarity. Over time those coins can be lost and become difficult to find so the demand increases and the price goes up. It may be that some collectors hang on to certain coins and then it is difficult to find one in the marketplace.
Grade is the condition of a coin. To get a reliable grade on a coin it is important to have a certification from a reputable grading company. NGC and PCGS are the top two most recognized grading companies. The higher the grade the more valuable a coin can be. MS70 is the highest, and then MS69 is the second highest, and so forth. Why does the grade of a coin matter? The higher the quality the higher the demand for that quality.
Composition is how much silver, gold or other precious metals are contained in the coin. Currently, silver is worth about $23 an ounce so if you have a one ounce silver coin it is at least worth that amount but because coins have other features as I have discussed in this article they are worth even more.
The appeal of a coin can bring more value because of its design, beauty, composition, uniqueness or maybe its historical value. An example of maybe all these would be mercury dimes. They were only made between 1916-1945, they have 90% silver, the picture is a unique and beautiful version of lady liberty who looks similar to the depictions of the greek god mercury.
How do you know if a coin will become more valuable over time? By understanding how things have become valuable in the past can help. Think of why you like the coin right now. Many others may feel the same way. I remember when I was five years old and I had the whole cast of action figures of the main characters on Star Wars. I loved the movies and many children did back then. Fast forward 40 years and now that whole set is worth thousands of dollars. Millions of them were made and if there are any in mint condition they are very valuable now. Coins are the same. I still wish I had them now, but like many toys, our mothers throw them out after we have had our fun with them.
I have found a new love in coins. I appreciate history and the principle of precious metals being a store of value. Because I know how valuable they are and how valuable they may become I get excited every time that I get a new coin for my collection.