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Market Cycles

Tom Becker

For many years the experts and serious watchers have agreed the coin market moves in cycles. If we begin in the 1960's a historical review will indicate this is indeed true. Periods of intense activity have been followed by moderate or even greatly diminished demand. What can confuse a historical analysis of market activity is that what triggers a boom or leads to a bust can be entirely different from the last or a past motivator. It is not as simple as determining that when A,B and C are in place the coin market will rise or when X,Y and Z happen together the market is sure to take a tumble. What does seem apparent during the last 50 or so years is long term stability is not found within the coin market-or have things permanently changed? Maybe what we are seeing now is only the beginning of unprecedented growth in demand and market activity.

No marketplace can exist without continual participation between buyers and sellers. Reasonable equality between these two groups is necessary to sustain a marketplace. It is when the buyers outnumber the sellers or the other way around that things get interesting. What has made the market for coins historically cyclical is trading in rare coins is hardly a necessity. Nobody needs to own rare coins. Collecting coins or buying them as an investment is an entirely discretionary activity. The same could be said for buying a diamond, playing a round of golf or eating an ice cream cone. Participation in these discretionary markets has recently made lots of people lots of money. Coin collecting is not a passing fad.

That we are now in the midst of a sensational up cycle in the coin market must prompt those who believe in the cyclical theory to wonder when it will all end and what will trigger the bust. Because they are being held responsible for most negative things that happen, I'm inclined to believe the Baby Boomers, or their guaranteed lack of participation will be responsible for the next coin market crash. Certainly unforeseen circumstances may trigger a major dip beforehand, but my prediction is that in about a decade the coin market will be dramatically less active than what we are experiencing today.

If you attended a major coin show during the late 1960's to the mid 1970's you would have noticed a good number of young dealers manning tables and even more young people wandering the bourse floor. Perhaps because there were so many of them, the coin business had caught the attention of some “boomers”. If you attend a coin show today, you may well see some of these same dealers doing business. Back in the 1960's there were few coin dealers who could rightly claim to have been full time professional numismatists for thirty years. Today this longevity seems commonplace. Claims of even forty or close to fifty years are not uncommon. Who is coming along to replace these folks?

Likewise, who will replace the comfortable Baby Boom collector who got a college degree without going into debt, and then worked at a place that will always provide a nice pension and health care as a reward for service?

A few years ago I had access to a survey done by one of the world's largest sellers of collector coins. Without going into detail, I was amazed at how consolidated the demographics of the customer base happened to be. The firm's aggressive and diligent efforts to build a younger customer base with buying power equivalent to today's 55-60 year old customers isn't working.

The great unknown that may completely negate my prediction of a dramatic reduction in market activity is whether or not the explosion in information and market activity spawned by the Internet will be sustained and grow. Rapidly increasing prosperity in developing nations will provide millions of new players with discretionary income. Will they use this extra money to buy coins? As for North America, predictable increases in the basic cost of living and ever growing taxation leads me to conclude that today's thirty-five year old will not be a major player in the coin market a decade from now. The Baby Boomers will disappear from the hobby and there simply won't be a like number of new potential collectors available to replace them.


Tom Becker is a regular contributor to the Canadian Coin Reference Site, you can direct your questions directly to Tom easily by E-mail: or visit Tom's website @


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