IS THIS THE GREAT COIN DEPRESSION?
Has our ‘annus horribilis’ left the world of coin collecting in dire straits? Not even close, writes ‘Coinosseur’ Sebastian Wieschowski, as he charts the encouraging response to the Covid19 virus across Europe
A new era began for coin collectors in Germany on the evening of 6 March 2020, after speculation had been looming for weeks as to whether the traditional coin fair ‘Numismata’ could take place as planned due to a novel viral disease. Terms such as ‘COVID-19’, ‘face mask,’ or ‘social distancing’ had not yet been added to the vocabulary of the general population at that time, and serious concerns were probably being voiced exclusively by virologists, but not by collectors and dealers. And so the new, which was published on the website of the trade fair organizer not before nightfall, was a real surprise for many of the fair’s guests. The Numismata was cancelled shortly before the official start of the fair.
While there was great indignation about the communication policy of those responsible in the following days, it is now apparent: European Numismatics was hit with full force by the Corona pandemic. After all, hundreds of guests from Germany and abroad had come to Munich and could no longer cancel flights, train tickets, and hotels, dealers had set up their booth and left Munich with empty hands. Other regional fairs were cancelled, floor auctions postponed. A traditional numismatic magazine from Austria went bankrupt after many auction houses had cancelled their advertisements. So was numismatics in Germany and Europe well on the way into the Great Depression?
Not even close! Online forums and Facebook groups related to coin collecting registered thousands of new members. The transactions that used to take place at trade fairs like Numismata were now taking place in social networks. And while many coin dealers complained about a drop in turnover, precious metal dealers in Germany were among the big winners of the crisis. In the meantime, major precious metal dealers in Germany were completely sold out. Many companies confirmed a gold rush that had not taken place since 2008 when the Lehman crisis shocked financial markets.
Precious metal trading houses, including the top dogs such as ‘pro aurum’ or ‘Degussa,’ but also traditional providers such as ‘Emporium’ or ‘MP
Edelmetalle’ are taking on the role of coin dealers in Germany. In addition to modern investment coins, they also offer historical gold coinage, so-called generic gold has become the most popular ‘crisis currency’ in Europe. Gold crowns from the German Empire as well as AustriaHungary, the Sovereign from Great Britain, or the Vreneli from Switzerland, they are all affordable ways of getting started in numismatics. And they are ideal as investment alternatives.
While the financial markets have apparently digested the Corona-shock in record-breaking time, the explosive price gains on the DAX and other European indices in the middle of the year astonished many observers, the dark clouds in numismatics have not yet cleared away: In times of crisis, money is ‘held together.’ A supposed luxury hobby like coin collecting is not at the top of the spending list in many families. Moreover, far too many dealers in Germany are still not prepared for the ‘digital change’; they have no online shop, let alone a website. Some web business cards look as if they were last maintained in the year 2000.
And terms such as ‘Facebook’ or ‘YouTube’ are better not to be used at all on coin shows in Germany, as social networks are still considered ‘newfangled stuff’ in many places in 2020.
However, tomorrow’s business in numismatics will be done on virtual markets. This is shown, once again, by precious metal trading companies; one of the largest YouTube channels relating to coins and bars is owned by a young precious metal trader: Dominik Kettner, born in 1989, has over 35,000 subscribers and reports daily from the world of precious metals. In an industry where young talents still have a hard time, Kettner is building up direct trust in his target group. And the sales figures prove him right, 2020 will be a record year for Kettner. Many other competitors are also reporting top sales figures. Some companies are reported to have already reached their annual sales figures from 2019 in April 2020. So there can be no talk of a ‘Great Depression’, at least not where new ways are being sought and found during the crisis.