High-end market proves safe haven for investors

By Jesse Robitaille

With the recent sale of the world’s most valuable coin for $18.9 million US (about $22.8 million Cdn.), the high-end numismatic market continues to prove itself a lucrative safe haven for investors.

The only 1933 U.S. “Double Eagle” approved for private ownership, the coin was among the last gold pieces struck for circulation in that country. It crossed the auction block during Sotheby’s “Three Treasures” sale on June 8, when it nearly doubled the previous world record of $10 million US (set by the finest known 1794 U.S. “Flowing Hair” silver dollar in a 2013 Stack’s Bowers sale). Owned by billionaire shoe magnate Stuart Weitzman, the Double Eagle’s estimate was set at $10 million US (about $12.1 million Cdn.) to $15 million US (about $18.1 million Cdn.).

“Nobody in the market is overly shocked at what that coin sold for yesterday,” said long-time dealer Sandy Cambell, the owner of Nova Scotia’s Proof Positive Coins, told CCN on June 9.

While others were unsure how the coin would sell, Campbell – who has more than four decades of experience in the numismatic business – said he was positive it would top $15 million US.

“I bet a guy $100 it would sell for north of $15 million (US). He didn’t think it would get there, and I thought it would probably sell for more than $20 million (US) but certainly more than $15 million (US). I mean, $15 million (US) is not in the cards, so it didn’t shock me at all.”

Total realizations for U.S. rare coins at major public auctions have mostly increased year over year, from $316 million in 2017 to $345 million 2018, $325 million in 2019 and $369 million last year.

Still, Campbell doesn’t believe collectors are being pushed out of the market.

“There are only certain people that can participate at certain levels, but whether they’re a kid putting together a 1992 quarter set or a billionaire buying ultra-rarities, there’s a spot for everybody in the marketplace.”

The recent sale, however, is a sign of the high-end market’s strength and its appeal to investors seeking a “safe haven” during the pandemic.

“A lot of people have been looking for a place to park money,” said Campbell. “People have made money in the stock market and they made money in the bullion market, and they see there’s more safety in something you can put in your hands – meaning rare coins and to some degree bullion.”

It’s reached a point where people who have never been “buyers” are now entering the high-end coin market, he added.

“It’s a weird phenomenon, but I think it’ll continue – really, it’s just starting.”

Campbell compared the high-end coin market to recent interest in other investor areas, including:

  • non-fungible tokens, which saw more than $2 billion US (about $2.4 billion Cdn.) in first-quarter (Q1) sales this year;
  • art, which reached $1.6 billion US (about $1.9 billion Cdn.) in Q1 2021 with a record number of transactions; and
  • sports cards, which saw a similar renaissance through the pandemic, with the PWCC 500 Index (the S&P 500 for trading cards) reporting a 12-year return on investment of 175 per cent (compared to 102 per cent for the S&P).

“It just goes hand in hand with the fact that money is not worth what it was worth – especially before the pandemic – and people are migrating to collectibles,” he added. “We never tout stuff as an investment, but rare coins have become an investment.”

CANADA’S NUMISMATIC MARKET

That phenomenon of the market’s strength drawing in even more buyers is also occurring in the Canadian market, “just not as much,” Campbell said.

“Since the pandemic started, we haven’t had any real big collections or anything really ‘super’ come on the market, but with the little bit that did come on the market, prices were probably double what I thought they would have been.”

Campbell, who managed the fixed-price sale of the Cornerstone Collection (nearly all 255 lots of which have sold for more than $5 million since 2019), believes the rare Canadian coin market is “probably the most under-appreciated market in the world.”

“In general, a lot of good Canadian coins are undervalued. We’ve probably fared better than most through the pandemic financially – I’m talking the country in general – so our prices have not caught up to the rest of the world. There’s just tremendous value in our numismatics, whether it’s paper money or rare coins.”

Throughout the pandemic, Campbell has been the underbidder (the person with the second-highest bid) on several “crazy expensive items,” he said.

“I just shake my head: it’s shocking what things have sold for, and yet a lot of people see higher value. But I don’t think it has ruled people out of the market; I think it’s brought a lot of people into the market, and I think people are recognizing there’s really good value in rare Canadian coins and paper money.”

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