I don't think it is a bubble. Bubbles are caused by a excessive demand based on investor speculation that prices will keep rising. That is not happening. Demand is now still lower than it was before the great recession. The rise in prices is due to a decrease in supply.
Regarding the last two points you make, readers may be interested in the following article written a few years ago by a Canadian numismatic dealer summarizing
his observations of the dynamics of ancient coin supply. The last three paragraphs are germane to the points you make.
I see no reason to doubt
his observations and logic, which would suggest that now is a better time to get into the hobby than hoping against probability for a return to the
good old days of yore.
The Evolving Ancient Coin Market
by Robert KokotailoOne has to look carefully at the timing of these things to see what is really happening. Here is a brief
history as I understand it, as to how the market has recently evolved in
ancient coins.
Prior 1975 probably about 70% of the coins on the market were recycle of old
collections, and 30% chance finds from construction, river erosion,
field walking, etc. Exact percentages are hard to pin down, but that is somewhere in the ball park.
The introduction of effective metal detectors about 1975 very quickly changed the percentages to about 70% fresh finds, and 30% combined recycle of old
collections and chance finds. The number of coins from
collections and chance finds did not diminish, it was simply an increased total supply due to metal detector finds. This happened mostly in
Britain and western Europe so large
hoards of
Roman and western
Greek coins, including coins from
Italy and some from
Greece, were what was available and prices for those fell. We did not see a lot
Roman colonial or Eastern
Greek coins.
About 1979 the US Government changed a law allowing
rare coins to be included in those tax deductible retirement savings portfolio's. Hucksters promoted it and many people who knew nothing about coins bought anything the promoters offered, creating a huge demand driving prices sky high. Common decent
Gordian III antoniniani were $125 with someone even attempting to create a futures market for them. Coins of all
types, not just ancient, were driven to very high prices. A lot of real collectors
sat on the
side lines during this period. Late in 1980 or early in 1981 the US repealed that law disallowing coins in those investment plans, creating a market crash that hit bottom between 1982 to 1983. Those $125
Gordian III ant's fell to about $12.50, and much of the rest of the market did similar things. When the market hit that bottom about 1983, collectors jumped in again and the market began to recover.
Around 1985
Britain and western Europe
had been very heavily metal detected and finds started dropping. With the
reduced availability prices began to rise. The percentage of coins on the market from old
collections started to become a bigger factor, although metal detector
hoards were
still appearing, just in smaller numbers. The market hit a peak about 1990.
In 1991 the iron curtain fell and everything changed. During 1991 and 1992 there was a flood of coins out of eastern Europe, which were the thousands of
hoards found and held by families not willing to take the risk involved in getting them out during the previous 60 years of communist rule. These were mostly the
types of coins found in the Balkans, so huge
hoards of 3th century AE
antoniniani, colonial bronzes, 2nd and 3rd century
denarii,
new style Athenian tetradrachms,
Alexander tetradrachms, etc.
Between 1993 and 1995 metal detectors flooded into those regions and fresh
hoards began appearing on the market in large numbers, continuing until about 2001. This was the period of
cheap coins because there were just too many coins for the collector market to absorb them all. That was partially alleviated by the appearance of
eBay with the wider marketing to an entire new group of collectors it allowed. If you
had been at a major
coin show in the US or
Britain at that time, you would have seen many new
hoards offered at every show. By about 2001 most of those easy finds
had been found, and the number of
hoards diminished rapidly over the next few years. With
reduced availability, prices started to rise. By 2010 one could go to a major
coin show, and sometimes no new
hoards would be offered. Dealers started to notice they were having a great deal of trouble replacing their inventory. Prices were rising.
Since 2010, the supply of new
hoards had dramatically dropped as they
had simply running out of places to look. Recycle of
collections is again becoming the dominate source of coins on the market.
Going forward I feel a few prediction are possible. Metal detecting will continue to diminish as a source of
new coins, because all the easy finds have now been made, and there are no new areas that will eventually come open that have not yet been searched. It will probably never drop to zero, but will never again be like it was prior to 2001. Chance finds will also diminish because many of the
hoards found by metal detectors between 1975 and 2001 are the
hoards that would have been chance finds over the next 200 years
had metal detectors never been invented. The primary source of coins on the market will from here on out will be recycle of
collections.
Taken together, this means that availability of
ancient coins had already dropped significantly from the 2001 highs, and will continue to drop. Prices have already risen to a point it is driving some collectors out of the market, and so with the
reduced availability we are also seeing some reduction in demand, although that is more true for the cheaper
types of coins (serious wealth collectors are
still there). I believe it will take 10 to 15 years for things to really stabilize, and it will take the form of
reduced demand and prices for the more common material, but high end coins will go higher. I guess in 10 to 15 years we will know.
