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Coins vs Pokemon! How are Valuations Reached?

Referred to as “the hobby of the kings,” coin collecting has a history going back thousands of years. Here we discuss the four main factors that continue to determine an individual coin's value.
Coins vs Pokemon!  How are Valuations Reached?
Heavyweights of the Numismatic and pop culture collectables world

Referred to as “the hobby of the kings,” coin collecting has a history going back thousands of years. Believed to have first started in Asia before appearing in the Middle East, Africa, and Europe. By the time of the Renaissance, coin collecting was primarily enjoyed by wealthy and powerful families as, according to Eldridge Kalford’s Coin Collecting for Beginners, “only wealthy and powerful families could afford to own a private coin collection.”

Luckily, the opportunity to collect coins has greatly expanded since the Renaissance. So much so that the total value of rare coins sold in the United States in 2020 was estimated to be $369 million; which is an increase from the 2017 value of $316 million.  While the valuations for annual markets can change year to year, there are four main factors that continue to determine an individual coin’s value.

Age is just a number

A minimal factor is actually a coin’s age. There is a widespread notion that the older something is, the more valuable it must be. However, this isn’t always the case. Take for example the 1922 British penny when compared to the 1933 British penny. Though 1922 British pennies are ten years older, their values range from a few pounds to a couple thousand pounds. In contrast, a single 1933 British penny once sold for $193,875 at auction. So, while a coin’s age can play a factor in its overall value, a more important factor is its Mintage.

The Importance of mintage and rarity

The primary aspect of a coin’s value is its mintage number. By “mintage,” we mean how many ‘copies’ of a specific coin were officially minted. Coins with a low mintage are typically worth more than coins with higher mintages.

Again, comparing the 1933 British penny versus its 1922 counterpart, there are believed to be only seven 1933 British pennies in existence. In contrast, there were over 16 million 1922 British pennies minted. Meaning, if 100k 1922 British pennies had been destroyed every year for the last century (a total of 10 million), there would still be nearly six million left over and would still leave the 1933 substantially rarer.

A Coin’s Condition

While context is always key, a coin’s condition can substantially increase or destroy its value. A coin’s condition, or its grade, is typically determined by five factors: strike, surface preservation, lustre, coloration and eye appeal. While grading systems vary from organisation to organisation and country to country, the overall goal is to make sure a coin’s distinct features are easily identifiable.

The Value Prior Ownership  

A unique aspect of collecting that gives items additional value is an item’s provenance. Though just a document listing an item’s history of owners, provenances are becoming increasingly more important. In addition to a provenance functioning as evidence that something was legally acquired, it tells an incredible story. Afterall, a provenance shows that one not only owns an item, but they are part of a continuity of people who were passionate about collecting. Provenances signify that one is part of a community that extends in the past and will continue into the future.

Coins vs. Pokémon and other Collectibles

The market for coin collecting not only increased in value in recent years, so did a variety of other collectibles. According to Ebay, “collectible card games like Pokémon also saw sales increase by more than 500% last year.” Collecting Pokémon and other relatively recent pop culture artefacts may seem similar to numismatics, the reality is that this new crop of high value collectibles lack the market guardrails and quality assurance systems which benefit coin collectors.

Collecting Frauds

For example, the value of Pokémon collectibles had been slowly increasing for years. So much so that in 2020 Entrepreneur.com wrote that in regards Pokémon, “true collectibles are guaranteed to increase in value.” Around this time YouTuber Logan Paul began collecting Pokémon cards and sharing information about his collection to his millions of fans. Paul’s presence added gasoline to an already hot market and he is seen as the main reason why long-term collectors had become priced out of the market.  The fever around Paul’s Pokémon collecting peaked when it turned out that he purchased a sealed factory case of 1st edition cards for $3.5 million, only for the item to be a fake.  

Though the box Paul purchased was verified by the Baseball Card Exchange, this organisation has only been around since 1990. In contrast, organisations dedicated to verifying coins have centuries of experience to rely on. So even when people encounter counterfeit coins, they are rarely highly valued and are easily weeded out by experts trained to identify frauds.

Stable Coins, Reliable Growth

In addition to fraud detection being more robust in coin collecting, numismatics benefits from a long history that adds stability to a coin’s value. Unlike Pokémon and similar collectibles that are still in their infancy, coin collectors rarely have to worry about massive swings in values. Adding to the reliability of coins is the material they are made from. At their core, Pokémon cards are just paper and ink; content which have little external value. In contrast, coins made from gold, silver, copper, and other materials benefit from those materials being highly valuable in their own right.

By Nicholas Yanes