Dave Wnuck's Making The Grade email newsletter is always a welcome addition to my inbox. Issue #42, published May 20, 2019 features his
"What Will the Coin Market Be Like 10 Years From Now?" article. I added a graphic from a 2014 Wall Street Journal blog article.
Time for my annual "Coin Hobby Trends for the Next 10 years" article. OK -- so I've never done one of these before. Well, here goes the
First Annual Edition... ?
It seems to me that right now the coin market is at an inflection point. So much so that predicting we are in for "more of the same" over the next
10 years would likely be well wide of the mark. So let me dust off the ol' crystal ball and get down to predict-er-ing.
The flood of information available to collectors means a more educated collector
The most frequent complaint I hear from my fellow coin dealers these days is - "Everybody now knows exactly what I paid for my coins."
You see, not too long ago it was difficult to find prices realized for coins sold at auction. You could do it, but it required a good, up-to-date
library and some time. Then Heritage came along and provided that info instantly. But that was only true of the coins auctioned at Heritage. If a
coin was purchased at any one of the other auction companies, it was still difficult to find.
Next PCGS came along with their CoinFacts.com website. It provided information on some other auction company prices realized, later all of them,
and later still a smattering of eBay auction prices realized too.
PCGS used to charge a monthly fee for this info, and it was well worth it. But then they went a step further and made it free to everyone. Now
everyone has access to all that valuable info at absolutely no cost.
Let me tell you a little secret: coin dealers hate this. I mean HATE - HATE - Double HATE this. But - the smartest of them learned to adapt to
this advancement and move on.
What might be bad news for dealers is very good news for collectors though. With a few keystrokes, anyone can now find when many of the coins
being offered to you were sold at auction and how much they sold for. Also, you can easily find what coins in the same grades and in nearby grades
have recently sold for. That information would have taken hours to compile 5 or 10 years ago, and that assumes one had access to all of the different
auction catalogs and their prices realized.
In the long run of course, an educated collector is the best asset a coin dealer could have. That is, if the dealer was running his or her
business honestly and transparently to begin with. The dealers that cannot adapt to this new information-rich era will struggle and likely fall by
the wayside. And that is the way it should be.
Sadly, the number of coin shops will continue to decline.
Quaint little coin shops, once ubiquitous in small town and rural America, will all but disappear. The shrinking population base of these areas,
coupled with high commercial rents and a persistently weak economy, will make it impossible for most of these physical stores to survive. Within the
next 10 years, this process will be nearly complete.
Yes, there will still be some physical coin shops serving large metro areas, although far fewer than in years past. And thrift and secondhand
stores will persist as well. But the bulk of coin transactions will take place on the internet via eBay, the auction company websites,
collectors.com, dealer websites and so on.
Areas like Proof & Mint Sets, Modern Commems, etc will Continue to Soften
Promotion-driven areas like these, along with other promoted areas like generic gold type coins, will continue to soften from their already depressed
levels. Too much supply chasing inadequate demand.
Some 20th Century Scarcities and Rarities will Continue to Impress
Certain items that have genuine scarcity or rarity (such as the recent sale of a 1964 Kennedy Half Dollar from an experimental Special Mint Set that
just sold for $108,000) will no longer be seen as oddities when they sell for big bucks, as they will occur more frequently (though truth be told, I
am still a little freaked out that a 1964 Kennedy Half dollar of any kind could sell for $108k).
There are many traps here too though. Common coins in "super grades" (MS67 red common date Lincoln cents, for example) will continue to
be slabbed, as the unslabbed supply of those coins are enormous. That will drive down the prices of coins where, for example, a PCGS MS67 Red graded
coin sells for $4000 and an MS66 Red example sells for $50. That's insane.
Coin Shows Will Shrink in Number and Become Wholesale Affairs
Many of the remaining major coin shows are being propped up by the auction companies, by holding their sales at those venues. As a good customer
(who travels to several national shows each year) explained to me at the recent EAC show in Ohio - "I'm going to travel to fewer shows from now
on. I plan my trips carefully and shop for the best travel deals, but it still costs me $2000 or so on average to attend a coin show - some more,
some less. I can buy a nice coin for $2000 sitting at home, and be ahead of the game."
It is hard to argue with that logic.
The collectors who currently attend shows tend to skew older, white and male. But don't despair, my friends. I spoke to a dealer who sells
virtually all his coins on Facebook, his website and other internet outlets and attends maybe 3 shows per year.
He said the customer mix he sees at shows are very different from those in his business. He said the majority of his online customers are 18-45
years old, and about 30% are female. My own experience with my online sales has been similar. People love collecting coins, if only they are exposed
To read the complete article, see:
What Will the Coin Market Be Like 10 Years From Now? (http://www.davewcoins.com/newsletter)
An educated collector is indeed the best collector, one who will most likely stay in the market long term. The proliferation of online data
sources benefits everyone, except for the dealers who market to the shrinking number of uneducated or lazy collectors. But there are always new
frontiers - areas of the market which haven't yet been made transparent. These provide continual opportunities for entrepreneurial collectors,
dealers and researchers alike.
I'm more optimistic on the future of coin shows and shops. The short history of the internet shows that in time markets tend to converge on a
"clicks and bricks" model - online retailers open shops to gain a physical presence while physical stores expand online. Of course,
Dave's not saying shows and shops will disappear. I think we're both saying that they will morph into new forms. And perhaps NONE of the coin
business founded in the pre-internet era will thrive - there is a lot of opportunity to serve today's collector's in the time, place and
manner they most prefer. Shows and shops that don't adapt in time will fade away. -Editor
THE BOOK BAZARRE
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