Coin collecting: what determines the value of the product?
If you’ve ever thought about delving into the world of numismatics, you’ve probably considered the value of coins. Why is it that sometimes, for example, a coin for sale on the internet is worth thousands, even though it looks identical to the one you have in your wallet, and even several pieces? Will a collectible coin be more expensive in 5 or 10 years? What determines the value of collectible coins? These questions are answered by experts from the Lithuanian Mint.
What defines the initial value of a coin?
Each coin is the official tender of the country whose denomination is minted on the coin. It refers to the circulating value of a coin, which, from a historical perspective, used to correspond to the raw materials used to produce the coin. Coins of precious metals – i.e., gold, silver – have traditionally always been much more valuable than their denomination, but today most coins are made of cheaper metals. For example, the so-called Nordic gold alloy (89% copper, 5% aluminium, 5% zinc, 1% tin) is used for the 10, 20 and 50 euro cent coins, and copper-plated steel is used for the 1, 2 and 5 euro cent coins. The exemption applies to collectible coins which, in most cases, are also worth much more than their denomination suggests.
Influence of numismatists on the value of collectible coins
One of the most important factors in determining the value of a particular collectible coin is the number of minted copies (mintage), which is strictly limited and increases the value of the coin over time. In addition, lower mintage usually means that there are more interested collectors than there are coins available, which also has a significant impact on the value of the coin – with demand outstripping supply, the value of extremely limited edition collectible coins increases every year. Other factors determining the value of a coin are the relevance of its theme, the originator or producer of the coin, and the technologies used in its production.
For those who would like to become numismatists, the most important thing is to learn how to estimate the potential value of collectible coins before starting your collection. First of all, it is necessary to take into account the material from which the coin is made and the legacy of the coin as a work of authorship over time – in other words, its historical, cultural or artistic significance. It is often the case that these aspects of collectible value are highly correlated, since coins intended to honour important historical events are usually minted from pure precious metals, and specific technologies such as UV printing, holograms, etc, are also used.
The criteria of coin quality
When planning to acquire collectible coins, it is worth paying attention to the quality of their minting, which is usually characterised by the type of minting – proof or proof-like. The first category comprises coins of the highest quality, specially designed for collectors, which have been produced with the aim of maximising their technical & artistic qualities and using extremely high quality equipment. These coins are packaged in special transparent capsules. Coins in the second category are produced according to simplified minting technology and are mainly intended for circulation, but are also found in the range of collectible coins.
High-relief silver coins are subject to another quality standard – antique finish. It means that the coin has been treated with a special surface ageing technology. Although the coins processed in this way are corrosion-resistant, they are packaged in special transparent capsules, too.
When evaluating a coin made of precious metals, the fineness of the coin, i.e., the amount of precious metal in the coin, is important. Thus, a 999 fineness means that the coin contains 99% pure precious metal, while 999.9 (corresponding to 24 carats, i.e., the purest gold) means 99.9% gold and only 0.1% impurities – the highest degree of purity of precious metal that can be achieved.