COIN GRADING SERVICES DRIVE MARKET GROWTH
IT’S QUESTIONABLE IF THE EXPLOSIVE GROWTH IN THE COIN INDUSTRY THAT WE’VE SEEN SINCE EARLY 2020 WOULD HAVE BEEN POSSIBLE WITHOUT THE EXISTENCE OF THIRD PARTY COIN GRADING SERVICES. It’s certainly hard to imagine that today’s savvy buyer, aware of the acute risks of counterfeits and privy to the critical importance of grading accuracy, would buy unvetted “raw” or unencapsulated coins with the same vim and vigor as we have seen in recent decades for coins that have been authenticated, graded, holdered and guaranteed as to grade and authenticity.
This is not to say that the hobby hasn’t experienced boom times before the dawn of the modern “slab” in the mid-1980s. The hobby saw explosive growth in the late 1930s and early 1940s with the advent of coin boards and coin folders, which encourage collectors to assemble date-and-mintmark sets of contemporary coins in cardboard panels and trifold displays. And in the 1950s and early 1960s, uncirculated rolls of late-date coinage and the discovery of modern rarities such as the 1950-D Je erson nickel and 1955 doubled die Lincoln cent drove untold millions to the hobby.
However, coin collecting saw the making of entirely new and affluent marketplaces with the founding of the Professional Coin Grading
Service (PCGS) in 1986 and Numismatic Guaranty Corporation (NGC) in 1987. PCGS was formed in 1987 by a group of seven leading rare coin dealers that included David Hall, Silvano DiGenova, Bruce Amspacher, Gordon Wrubel, Van Simmons, John Dannreuther, and Steve Cyrkin. Within a month of officially launching on February 3, 1986, the company received nearly 20,000 submissions. Soon major rarities started pouring in, exemplifying the need, and certainly the demand, for a business like PCGS.
Along came NGC the following year, founded by John Albanese and offering its own brand of authentication, grading, and encapsulation. NGC quickly proved popular. In short order, these two third-party grading firms – ardent rivals in the corporate sense – collaboratively spun a rare coin revolution that enabled sight-unseen trading of coins in a way that was perhaps unimaginable just a few years earlier.
Slabbed rare coins fueled the coin boom of the late-1980s when investment fund gurus pinned their hopes on encapsulated Walking Liberty halves, Morgan dollars, and classic commemoratives with labels declaring grades of Mint State-65, Mint State-66, and Mint State-67. Even after Wall
Street exited the numismatic scene by the early 1990s, certified rare coins remained essential to the marketplace. PCGS and NGC became household names in numismatic circles, as did ANACS and Independent Coin Graders.
In 2001, PCGS brought its novel registry set concept to the internet, soon followed by NGC. The idea that collectors could now showcase their collections online and compete for top honors based on the grade-point averages of their encapsulated coin sets not only created a new sense of community, but it also spawned a new market for high-end modern coins. Suddenly, a rare late-date Lincoln cent graded, say, Mint State-68 RED or Mint State-69
RED, went from being merely a “pretty” coin to become the linchpin piece that would leapfrog one collector’s registry set past their nearest competitor on the all-important scoring averages. It didn’t take long for low-population contemporary coins in the top grades to become four- and even five-figure rarities.
Certified Acceptance Corporation (CAC) entered the third-party grading arena in 2007 and serves a crucial role in today’s marketplace. Whereas companies such as PCGS and NGC authenticate, grade, and encapsulate coins, CAC evaluates the quality of already certified coins and gives its approval to pieces that solidly make their respective grades.