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What does a worldwide pandemic mean for coin collectors? We thought this looked like a pretty good answer.
COVID-19: THE LONG- AND SHORT-TERM IMPACT OF A CRISIS ON COIN COLLECTING
04/19/20
Covid-19
As a nation and a world, we are currently in a state of upheaval. These “unprecedented times” have brought confusion to quite literally every aspect of our lives. We’re all locked in our homes and feeling on edge wondering what could possibly happen next. The coin collecting world has not escaped this uncertainty. Our events have been cancelled, the marketplace is shifting, and there’s no telling what the coming months or even years will bring. Fortunately, things may not be as ambiguous as they seem.
As collectors and sellers, we do have some history to guide us here. We’ve seen times of crisis before and they may help us understand what to expect going into and coming out of the COVID-19 pandemic.
THE MARKETS WILL DIP
In times of crisis people want to have cash on hand to make essential purchases. In that first stretch, all we’re thinking about is buying food and toilet paper. We’re seeing that initial dip not only in the stock market but in gold and silver markets. People are selling off what they own and limiting expenses in preparation for the worst. These dips are similar to those we experienced during past outbreaks, including SARS and the Swine Flu.
THE GOLD AND SILVER MARKETS WILL RALLY
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The good news is, the markets are resilient. Especially when it comes to epidemics. Following the peaks of ebola and the swine flu, things rebounded rather quickly. That being said, those may not be the most accurate comparisons. The global—or pandemic—nature of the Spanish flu as well as the world’s reaction to it—shutting down businesses, social distancing—is more similar to the coronavirus. The market in this case took longer to recover, but it did recover.
Granted there were a number of other factors at play during the Spanish flu, including WWI and a health system that isn’t nearly as sophisticated as today’s health systems. Which is to say, we don’t have a clue what our financial system is going to do in the coming months. What we do know is, when the financial system goes haywire, the gold and silver markets rally.
People like to hold onto gold and silver. It’s a store of wealth that knows no geographical boundaries.
It’s why we saw gold and silver prices spike during the Great Recession. And it’s why we’ll likely see them rebound in the coming months.
COIN COLLECTING WILL SURVIVE AND EVEN GROW- www.coinsforsale.com
Of course, coins can’t be directly compared to gold and silver bullion. We, surprisingly, haven’t seen much of the dip we expected to see in coin sales. This is likely because the value of coins goes deeper than the marketplace. There is an intrinsic emotional value to collectibles.
A story behind every piece. These stories don’t go away because people are panicking. During the Great Recession, people with recession-proof money kept on collecting. In fact, they collected more.
And people were still leaving their homes in 2008. During COVID, we’ve got people stuck at home, looking for new hobbies and finding the money to spend on those hobbies. It’s why puzzles have grown as scarce as toilet paper. Coins are the perfect hobby to explore during this time. People are sitting down with their kids, learning about the coins. Learning what was going on in the world when they were minted. Coins carry a global history that is extremely relevant right now (plus, their resale value is much higher than puzzles).
PEOPLE WILL FIND NEW WAYS TO BUY AND SELL- www.coinsforsale.com
Coin shows all around the world are being cancelled just as they were in the wake of the Spanish flu. The difference now is that we have other options. As we all shelter in place, the market is moving online. This shift has made it more important for buyers to find vendors they can trust. When you’re at a show you can examine the coin, hand off the cash, and walk off with exactly what you paid for. Online, you run the risk of getting poor quality coins, or worse, nothing at all. With collectors forced to do their buying virtually, they’re getting savvier and, as a result, more and more secure online marketplaces will start to emerge.
This will likely mean the landscape for the physical shows will remain permanently altered. If vendors use this time to build trust with buyers from the convenient isolation of their own homes and offices, they might find shows aren’t absolutely critical to their business anymore.
There will be no need for them to pack up millions of dollars in a coin case, hoping everything stays in perfect condition as they hit every stop on the show circuit.
RARITIES WILL EMERGE
Some of the most valuable coins in the world were born out of the Great Depression and, ultimately, the end of the gold standard in the U.S.. During the Spanish flu, there was a run on silver due to its perceived antimicrobial properties. When the flu subsided, demand for silver dropped and subsequently so did the minting of silver coins. A century later, coins from that period are commanding top dollar.
We’re already seeing how the trickle down of COVID will lead to rarities in the marketplace. This year’s production of the silver eagle, for instance. If minting is deemed nonessential and production goes down, we’re going to see a big drop in the amount of these widely collected coins on the marketplace. What’s more, the biggest grading companies in the world have also suspended operations, so even if they continued minting the silver eagle, there is no way to grade them. Throw in the backdrop of a global pandemic and the fact that this is the final year of the silver eagle design and you’ve got an extremely rare coin on your hands.
Without a doubt, things are tough right now. But we’re going to get through it. And we’re going to get through it with some quality collecting time and a few rare coins that will help us tell the story of the global pandemic of 2020.
STAY IN THE LOOP WITH COINS FOR SALE- www.coinsforsale.com
