US Coins

Monday Morning Brief for June 20, 2022: Condition frenzy

This PCGS MS-68 red 1902 Indian Head cent brought $144,000 at a June 14 Stack’s Bowers Galleries auction. The same coin in Mint State 60 brown is worth about $35. How did we reach this point?

Original images courtesy of Stack’s Bowers Galleries.

For years, collectors have been advised to buy coins in the best condition that they could afford, to avoid coins with problems — in short, to stress condition above all else. Good advice, but has the market gone too far in stressing condition?

Two articles in the July monthly issue (one available only to subscribers to the print and digital editions) focus on the importance condition plays in the collector marketplace today. Chris Bulfinch discusses set registry programs in his “Back to Basics” column in the July issue and Steve Roach in his "Market Analysis" reports on the astounding six-figure price realized for a top-grade common-date Indian Head cent that, in lower Mint State grades, can be bought for $50 or less.

Many of those reading these words began collecting coins when a coin with no circulation wear was considered to be “Uncirculated.” If it was untoned, it might be called “Brilliant Uncirculated.” Grades mostly carried no numerical elements except for the large cents of 1793 to 1814, and that was due to a problematic grading system established by problematic numismatist William H. Sheldon in a book cataloging early large cents. For most series, though, coins were graded “Good” or “Very Fine” or “About Uncirculated” or “Uncirculated.” Astute buyers might pay a premium for one Uncirculated coin over another of the same type, date and Mint mark, simply because it looked prettier, but generally, there was little differentiation in price guides like Coin World’s original “Trends of U.S. Coins.” Indeed, issues of Coin World published when I joined the staff in October 1976 had a single column for the top grade, labeled “Unc.” Collectors and dealers reading those issues then would have dismissed the possibility that a 1902 Indian Head cent in “Uncirculated” condition would one day sell for $144,000 as fantasy; Trends in 1976 listed the coin as worth $35 in “Unc” condition (even today, an MS-60 brown 1902 Indian Head cent is worth about $35).

The collecting world is much different today, partly due to the establishment of numerical grading for most series of U.S. coins with the 1977 publication of the American Numismatic Association grading guide. Granted, the informal expansion of the Sheldon numerical grading system to other series of U.S. coins had already begun when I was hired by Coin World. That usage, however, had not made its way into the standard price guides of the era, and not everyone followed that usage. The introduction of the ANA grading guide in the late 1970s and establishment of third-party grading services in the 1980s, and the ever expanding addition of grades to Sheldon’s 1–70 scale changed things drastically. The establishment of online set registry programs by Professional Coin Grading Service and Numismatic Guaranty Co. in 2001 birthed the intense competition seen today for certain high-grade coins.

Today, single-grade increments can result in tremendous price differences for a coin of a particular design, date and Mint mark. A top-population coin can bring many times what a similar coin one or two grades lower might sell for at auction.

All of this is fine (Fine 15?), but will current trends continue?

Assigning a grade to a coin is subjective. Five people could look at a coin and arrive at a few different grades. Today’s Mint State 65 might be Mint State 64 or 66 some day. An untoned coin like a red 1902 Indian Head cent might eventually tone to brown and red. Set registry competition might wane as collectors find new approaches to collecting coins.

We reached this point, where a common coin in an uncommon grade can sell for an extraordinary price, through a series of incremental steps occurring over a period of decades. No one can guarantee, however, that we have  reached the top of the stairway or that we will not collectively decide some day to turn around and take a few steps down. This story is not yet ended.
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