Is this pricing structure logical? Sustainable?

TheCoinHound

The best XF example of some coin is worth about three times the value of the worst XF.

The best uncirculated example of the same coin is worth about 75 times the value of the worst uncirculated example.

Is this pricing structure logical? Is the market for the best MS coins a bubble? Are superb quality circulated coins an incredible bargain? What do you think the numbers will look like in a decade?

Obviously, the numbers will vary for issue to issue, but just go with it.

What do you think?

MeantToBeSpent

The best MS coins are the best coins period. Either you have to pay up and battle it out or just give up. It seems perfectly logical BUT I do believe all (rare) coins are in a bubble. One needs to take into account the changes in grading over the past 10 years. I posted some stats on high grade Walkers in another thread but to summarize, many coins that used to be a few hundred dollar ms66 are now a $1000+ ms67, and those that used to be a four figure ms67 are now five figure ms67+s. And then add on top of that the more recent run-up post covid. To me it really is insane.

Winesteven

Ok, so here’s my two cents worth:

1. As with many things in life, certain people will pay for quality, and others won’t. Some people with a LOT of assets want THE very best, others with the same assets don’t care. We all make choices. I’ve chosen to buy high quality coins that I believe are within my means. Even though these coins are higher grade than what many other collectors are comfortable doing, there are many collectors that will buy coins at higher levels than I’m comfortable doing. So yes, this structure is logical, and the concept is sustainable. It has always been this way, even though the differential has been less.
2. That doesn’t mean there will not be bubbles and price fluctuation. That has always happened too, and is really a different concept than the first.
3. Yes, in a relative sense (and with many collectors and non collectors is COMMON sense) that defect-free eye appealing circulated coins are indeed a better “value” than Mint State coins in the mid to high grades. That’s why AU coins are in such demand in many “Classic” series, especially AU58 and 58+, even before the brilliant marketing concept of the “Everyman” sets came about.
4. I believe in a decade you’ll still see a very significant pricing differential between circulated and uncirculated coins. Will that differential grow greater than it is today? I have absolutely no idea.

Steve

MarkFeld

I apologize but I’m not willing to just go with it. In order to try to answer in a meaningful way, I think it might depend, not only on the percentage premiums involved, but also, what those percentages are in terms of actual dollar amounts. In addition to that the populations in various grades could make a significant difference.

Vasanti

Another major driver is registry sets. People are paying to win, not just to collect.

Winesteven

Vasanti said:

Another major driver is registry sets. People are paying to win, not just to collect.

I'd suggest only those at the VERY VERY top two or three spots, yes. But the vast majority of us are OK with whatever ranking the coins we choose fall at.

Steve

DeplorableDan

Winesteven said:

Ok, so here’s my two cents worth:

1. As with many things in life, certain people will pay for quality, and others won’t. Some people with a LOT of assets want THE very best, others with the same assets don’t care. We all make choices. I’ve chosen to buy high quality coins that I believe are within my means. Even though these coins are higher grade than what many other collectors are comfortable doing, there are many collectors that will buy coins at higher levels than I’m comfortable doing. So yes, this structure is logical, and the concept is sustainable. It has always been this way, even though the differential has been less.
2. That doesn’t mean there will not be bubbles and price fluctuation. That has always happened too, and is really a different concept than the first.
3. Yes, in a relative sense (and with many collectors and non collectors is COMMON sense) that defect-free eye appealing circulated coins are indeed a better “value” than Mint State coins in the mid to high grades. That’s why AU coins are in such demand in many “Classic” series, especially AU58 and 58+, even before the brilliant marketing concept of the “Everyman” sets came about.
4. I believe in a decade you’ll still see a very significant pricing differential between circulated and uncirculated coins. Will that differential grow greater than it is today? I have absolutely no idea.

Steve

+1

Tyrock

Registry sets are driving prices.

Winesteven

Tyrock said:

Registry sets are driving prices.

To some extent yes. But prices for eye appealing coins at the 64 and 65 level, especially with CAC stickers, are still strong. Coins at these grades are not at the pinnacle of Registry sets, so obviously the market is deriving strength from a broader base than just top Registry participants.

Steve

jerseyben

Im not sure I agree with your premise... Or if there is even a formulated argument here. Are market prices ever logical? Who sets the "structure" and what should it be? Market prices are what they are... The market decides what it can and will bear.

Catbert

jerseyben said:

Im not sure I agree with your premise... Or if there is even a formulated argument here. Are market prices ever logical? Who sets the "structure" and what should it be? Market prices are what they are... The market decides what it can and will bear.

I agree with this comment. It sure would be nice to have an agree option underneath a post.

proofcollection

The market determines the prices. Supply and Demand.

Coinbuf

Winesteven said:

Tyrock said:

Registry sets are driving prices.

To some extent yes. But prices for eye appealing coins at the 64 and 65 level, especially with CAC stickers, are still strong. Coins at these grades are not at the pinnacle of Registry sets, so obviously the market is deriving strength from a broader base than just top Registry participants.

Steve

But it can still derive strength from other than top registry members, the new everyman MS sets that top out at MS64 are no doubt driving prices of lower and mid-grade MS coins higher at least to some extent.

Winesteven

I fully agree that AU58, AU58+, and MS64 coins do get significant boosts from the Everyman and Everyman MS sets.

But my sense is that most common date MS65’s still have significant market value pricing over the 64’s, even though they are not at the pinnacle of Registry sets. This is due to market strength.

Steve

scubafuel

The top wealth brackets don’t want the best XF, they want the best coin, period. And it’s hard to see that changing. Those highest brackets are what cause the spread in MS to be much larger than any other tier. 

proofcollection

scubafuel said:

The top wealth brackets don’t want the best XF, they want the best coin, period. And it’s hard to see that changing. Those highest brackets are what cause the spread in MS to be much larger than any other tier. 

I would argue that it's more due to the low populations of the top pop coins. Or probably a combination thereof.