Collectible coins as an investment: what is increasing in value and why

Collectible and commemorative coins as an investment

Unlike bullion coins, the value of collectible coins is determined not by the metal, but by rarity, demand and condition. Here the logic is different: if bullion coins follow the price of the metal, then collectible coins follow the wishes of specific buyers.

The potential return on collectible coins can be significantly higher than that of bullion coins. But the risks are also greater. A coin may not find a buyer for years, prices depend on an extremely narrow market, and mistakes when buying (buying a fake or overpaying) can be costly.

Which coins have the best investment potential

• Commemorative 2 euro coins from microstates - Monaco, Vatican, San Marino. Small circulations and stable demand.
• Coins of the USSR and post-Soviet countries - some rare Soviet coins have risen significantly in price in recent years.
• Coins of erroneous mintage - defective coins with stripes or other defects are especially valued.
• First coins of new states or Central Banks - first issues always attract the attention of collectors.
• Proof coins of limited series - mirror quality in beautiful packaging.

Investment horizon

Collectible coins are usually a long-term investment for 5–15 years or more. In a shorter period of time, it is difficult to realize the growth potential and recoup the purchase costs (stores and auctions usually have a markup of 10–20% of the market price).

What determines the growth of the price of a coin

For your investment in coins to be successful, it is important to understand the factors that affect their value. Not all coins increase in price - there are some that remain unchanged for years or even become cheaper.

For coins made of precious metals

• The price of the metal on the world market is the main driver. Depends on demand (industrial and investment), supply (mining) and geopolitics.
• Dollar exchange rate — gold and silver are quoted in dollars, so their price in hryvnia also depends on the USD/UAH exchange rate.
• Inflation and interest rates — when rates are low, precious metals become more attractive as an alternative to bank deposits.

For collector coins

• Rarity — mintage, number of surviving copies.
• Demand — how many collectors want this particular coin.
• Condition — UNC and Proof are always more expensive than coins in circulation.
• Trends and fashion — certain topics and countries may become "fashionable" among collectors.
• Economic situation - during a crisis, people spend less on hobbies, prices fall; in good times, they rise.

Examples of successful numismatic investments

To understand the real potential, let's look at a few specific examples of coins that have shown significant growth in value.

Gold in 20 years

An ounce of gold in 2004 cost about $400. In 2024, it will be over $2,000. This is more than 5 times the growth, or about 8% per year - much higher than the average inflation in most countries. A gold "Philharmonic", purchased in 2004 for ~$420, is worth over $2,100 today.

Monaco 2007 (Grace Kelly)

A coin purchased at face value in 2007 (2 euros) is worth 1,000–4,000 euros today, depending on condition. Those who were able to purchase a few of these coins through a bank when they were issued made extraordinary profits.

Soviet Rare Coins

Some rare USSR coins (for example, 1947 or 1958 coins that entered circulation due to a manufacturing error) have increased in value hundreds of times over the past 30 years.

Silver Eagle in 2020

In March 2020, at the height of the COVID-19 panic, silver fell to $12 per ounce. Those who bought the Silver Eagle then were able to sell it for twice as much in August of the same year - silver reached $29.

An important caveat: past results are no guarantee of future results. Each of these examples required either the right coin choice or the right moment to buy. Or both.