2016 is virtually over and a lot of big things have happened in the collectible currency market during the year. The following list is in no specific order; it’s just a recap of a few notable events.
- Manifest Auctions, a new upstart currency auction house, was acquired by Stacks Bowers. Stacks is of course the oldest coin auctioneer in the country. The merger was a big move for Stacks and put them in a position to get a lot of fresh currency consignments.
- The largest private market maker for rare currency, a dealer out of New Jersey, has for the most part left the business. The currency market is about a 50 million dollar a year industry, and probably less than 30 people make a full time living dealing in currency. One major player leaving can leave a big hole.
- Ebay continues to be a very difficult place to do business. Anything with an asking price or starting bid of $2,500 or more has to be graded by a third party. And only the two grading firms of PMG and PCGS are acceptable for ebay selling purposes (and for major auctions). This was a great move to protect new and naive buyers. But it does restrict the high end of the market.
- Sadly, new collectors don’t seem to be entering the market and spending like they once did. The market is usually supported by collectors spending $1,000 – $5,000 two to three times a year. And there are certainly still collectors like that, but those same collectors were in the market 20 years ago. There have probably never been more collectors willing to spend $100,000 and not think twice, but the “working collector” seems to have almost completely disappeared. You just don’t see anyone really working on type sets or nickname notes anymore. People either want $50 – $500 hole filler material, or they want the best of the best.
- There is a lot of market stagnation right now. The average currency collector (think white male 50+) has never had any more money than he does right now. Real estate has never been higher, the stock market has never been higher, and most people who want to work are working. The problem is that when you feel rich you don’t want to sell your prized possessions, like your currency collection. So most major auctions are struggling to get highly important holdings. The average auction right now usually consists of a handful of notes worth $10,000 or more that are fresh to the market, and the rest of the sale is just stuff. There is a lot of money on the sidelines waiting to jump in. The right material just needs to show up first.
- Information for sellers is at an all time high. That is a good and bad thing. Our website, and others for coin values, and other collectibles seem to keep popping up. If you wanted to sell a coin in the 90s you basically had to buy a printed reference guide and work with a couple of local coin shops and just hope for the best. You never really knew if you were getting a good deal. Today you can access millions of auction results, numerous price guides, and talk to as many experts online as you want to. It is great to be informed and not make impulsive decisions, but there is also a time to sit back and listen to reason. Just because you can find an auction result in 2007 where your banknote sold for $12,000, doesn’t mean you are going to get that price today. The same thing goes for looking at a price guide from 2008. A long term concern that is really starting to pop up more now that the general American needs money less urgently, is that people with good material are going to continue to be holders instead of sellers. People are viewing rare coins and currency as some type of mutual fund or rainy day stash. As we have said in many previous blogs, nothing will ever be any rarer than it is today. Don’t get caught up in trying to find the exact right piece of information to support an inflated price. If you want to sell something, do a little homework, talk to a couple of people, then make the decision that is right for you. But don’t turn into a speculator waiting for the exact right timing. History has shown that the right timing is probably right now.
- We are still waiting on the next driving factor to get people excited about collecting. This ties into number 4 and 5 above. From 2000-2005 there was an onslaught of new collectors. People could bid online and see color images of banknotes that they might not have seen before. 2006-2010 was a period of comradery where collectors were excited about collecting and talking about in chat rooms and forums. Collectors were turning friends and family members into collectors. Thanks to tv shows like Pawn Stars, American Pickers, and dozens of knock-offs, the general public got a glance into the world of collecting from 2011 to 2015. At this point though, currency collecting is kind of old news. The market really needs an earth-shattering hoard to be found which creates an international news story, or some type of book needs to reach the masses for currency collecting to get the shot in the arm that it needs right now. Hopefully 2017 will see that event happen.