Coins & Money

Early U.S. & Colonial Coins – Buy for Investing or for Jewelry?

Coin collecting is one of the key themes within collectibles. It is also now undeniable that collectibles have turned into an alternative asset class all on their own. In fact, collectibles are now being invested in to the point that they are competing with stocks, bonds and real estate.

Collectors Dashboard is aware that many coins within numismatics actually end up as a focal point within jewelry and decorative items. In this particular case, what about coins from the pre-1800 early days of the United States? Or what about the colonial coins issued when the U.S. was just a bunch of colonies under British rule?

There is a small problem for true coin collectors when old historic coins are altered to be used in the jewelry category. They are technically still collectibles or investments, but when coins are altered their value to collectors and investors plummets.

Lower prices should make for a bad investment. That said, does it really?

Bargain buyers may want to buy these coins with holes in them because they are dirt cheap versus graded and encapsulated coins in high condition. For those collectors on a budget, the coins which had previously been altered might make a great entry point — particularly for those coin investors wanting to build upon a new $500 limit coin collection.

A 1796 United States silver dime in FINE condition is worth $5,199 dollars as listed in USA Coin Book online. Retail price is always higher than what the average person walking in off the street will be able to receive fore their asset.
A search on eBay at the same time of writing showed a sample of the same coin in the same condition for $1,546.30. The difference between these two, and the reason for a drastic price differential, is that the eBay coin has a hole drilled through the top where someone wore it as jewelry.

The value of these coins have risen over time. The official Red Book guide of United States coins from back in the year 2004 lists the same first year of issue American dime in Fine condition for $2,000. Fine condition is described as “all drapery lines visible. Hair partly worn.” With a mintage of 22,135, this is Americas first dime. 2004 was the year of a gradual rise in early US coin values. Age and increasing scarcity make investing in damaged coins like these more appealing.

A rapid increase in value for coins with damage like a hole should be considered a barometer for sure footed investing. A Guidebook of United States coins from back in 1972 listed the same coin in Fine condition for $700.00. This particular coin has not lost value in the last five decades. Since 2004 the coin has nearly tripled in price as Early US coins become more collectible.

A sample of an 1853 gold one-dollar coin in Extremely Fine condition was worth roughly $320 in early 2021. In 2004, this gold one-dollar coin was worth $175.00 in the same condition. The melt value of the coin according USA coin book is $85.86. An eBay listing for one with clear features but well circulated around Good condition but with a hole above the head was last seen in active bidding at $157.55 with 8 bids and 2 days left in the auction.

Repurposed for Jewelry was an expression of endearment by the placement of the hole in order to keep the features of the coin. Any true collector would wish for a hole to not be present on historical coins. If the last ten years have seen a an equivalent doubling of value, what might happen over the next decade to coins that are not altered or defaced with a hole?