Coin collecting is a very interesting hobby like stamp collecting. Each coin has various remarks on it and a story behind. It can also be very rewarding depending on the value of the coin. Some ,such as very old Chinese coins, are not worth so much more than their face values. However, some coins, such as Single 9, can be worth multi million US Dollars. How to figure out what is the value of a coin?
The most important factor in coin value determining is the market demand just like in every other trade. The more customers want to have it, the more precious a coin is. This factor is even partly independent of how rare a coin is. Some coins, popular among collectors, can be traded with higher prices than some others that are rarer.
The second most important factor is the rarity of a coin. Usually, the rarer a coin is, the more valuable it will be. Some coins are produced in high numbers for various purposes. These are most probably those, that are circulated. These coins have lower prices so that everyone can obtain one for investment. However, their values are thousands of times less than an uncirculated precious coin that can be found only in low numbers. The uncirculated coins are difficult to obtain and they preserve their mint state (MS) much easier.
Another very important factor is the grading of a coin. Grading is the condition of a coin in terms of physical defects such as scratches and wearing. There are numerous grades a coin can be classified as. These are different for circulated and uncirculated coins. The most ideal grade of an uncirculated coin is MS-70 where the coin is in a perfect condition. This is practically non-existent. As the grading goes down to MS-61, the luster may become dull, the striking details may become less, there may be many contact marks that get attention or there may be hairlines. Circulated coins, on the other hand, are graded according to one primary factor. Wear! There are many grade steps that mainly take into account the wear and also the luster. There is also another measure called split grading. This means, obverse side of the coin has a different grade than the reverse side. Since the overall grade is defined by the obverse side, if the reverse side has a significant grade difference, determining a split grade is a must.
The bullion value is another factor in pricing a coin. Bullion value is the value of the metals, the coin is made of. If the coin is made of gold, silver or bronze, the value will not be less than the melt value. In this case, the face value is not that important. However, if the coin is not made of such precious metals, than it is unlikely that its value will be so much more than its face value.
Keeping these points in mind and obtaining some subscribed publications, magazines or books makes it easier for the beginners to figure out how much a coin is worth. You can also check coin auction sites to see the most up-to-date value. Another way to figure out a precise value is getting an opinion from a consultant who has a significant experience in coin grading. This is a great way to prevent overgrading and hence overpricing.