By Doug Winter – RareGoldCoins.com on the Liberty Head Quarter Eagle ……
CoinWeek Content Partner ……
A recent conversation with a good client about the impact of increased demand upon his area of collecting ( Liberty Head quarter eagle ) inspired me to write this article. The economics of numismatics is simple: the value of a coin is largely based on simple supply and demand ratios. If there are 50 examples known of a specific issue, there must be at least 50 people who want to buy one for it to be of value beyond its most nominal worth?
In certain series, the supply vs. demand ratio is out of whack. This is why, as an example, silver commemoratives are valued at a fraction of their late 1980s market highs. Third-party grading has quantified rarity and it is easy to determine that a low-mintage issue such as a 1933-D Oregon half dollar (only 5,008 struck) has much of its original mintage intact. Let’s assume that at least 3,000 of these exist; for there to be any increase in price for average quality pieces (in this case MS63 to MS65) there would have to be hundreds of new collectors.
The supply/demand ratio is much more succinct in the Liberty Head quarter eagle market. I know of at least four or five new collectors who are especially interested in better dates with CAC approval.
Let’s take a look at a specific area of the quarter eagle market: Dahlonega issues in EF with CAC approval. According to my quick calculation, there are a total of 64 (eight Classic Heads and 56 Liberty Heads). I’m going to make the assumption that this number is slightly inflated by resubmissions and that there are just 50 or so coins. Now let’s make an assumption that at least half of these coins are off the market in tightly-held collections. This leaves us with just 25 Dahlonega quarter eagles in EF with CAC approval.
1842-D $2.50 PCGS EF40 CAC. Images courtesy Douglas Winter Numismatics
If three new collectors enter the market and compete for these 25 coins, this has a HUGE impact on the supply. In fact, this would be the same impact as if hundreds of new collectors suddenly wanted an MS65 1933-D Oregon half dollar. And in most any scenario, the chances of there being three new buyers of CAC-approved Dahlonega quarter eagles seems a lot more feasible than 500 new silver commemorative buyers.
This increased demand is not limited to something as series-specific as EF D-mint quarter eagles with CAC stickers. The four or five collectors I know of in this space (and I am willing to wager that there are at least four or five others with whom I do not do business) have more general wants for their collections.
1872 $2.50 PCGS MS62 CAC
Let’s say I purchased a neat coin like an 1872 quarter eagle graded MS62 by PCGS and approved by CAC. In years past, this was a reasonably difficult piece to sell, despite being obviously scarce and, in my opinion, very undervalued. Today, this coin is suddenly in greater demand as it is in the wheelhouse of a number of new collectors.
But a rising tide doesn’t lift all boats. Currently-unloved quarter eagles such as common-date Liberty Heads in MS65 and MS66 fall squarely into the generic category and the new collector buying the aforementioned 1872 in MS62 is unlikely to care about a 1905 in MS66.
The major point of my article is this: in thinly traded markets with limited supply, even a minor uptick in demand has a profound impact. We are seeing this right now with interesting, nicer quality Liberty Head quarter eagles and this is likely to continue as this denomination grows in popularity.
Do you have further questions about the economics of coin demand? Or perhaps you want to begin a nice collection of Liberty Head quarter eagles. If so, please contact me via email at [email protected] and we can discuss your needs.
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About Doug Winter
Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was 10 years old, buying and selling coins at conventions in the New York City area.
In 1989, he founded Douglas Winter Numismatics, and his firm specializes in buying and selling choice and rare United States coins, especially US gold coins and all branch mint material.
Recognized as one of the leading specialized numismatic firms, Doug is an award winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and exceptional eye for properly graded and original coins has made him one of the most respected figures in the numismatic community and a sought after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. He can be reached at 214-675-9897.
Doug has been a contributor to the Guidebook of United States Coins (also known as the “Redbook”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues
In addition he has authored 13 books on US Gold coins including:
- Gold Coins of the New Orleans Mint: 1839-1909
- Gold Coins of the Carson City Mint: 1870 – 1893
- Gold Coins of the Charlotte Mint: 1838-1861
- Gold Coins of the Dahlonega Mint 1838-1861
- The United States $3 Gold Pieces 1854-1889
- Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
- An Insider’s Guide to Collecting Type One Double Eagles
- The Connoisseur’s Guide to United States Gold Coins
- A Collector’s Guide To Indian Head Quarter Eagles
- The Acadiana Collection of New Orleans Coinage
- Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
- Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
- Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis
Finally Doug is a member of virtually every major numismatic organization, professional trade group and major coin association in the US.
