Forces that Govern the Collectibles Market
Adam smith wrote the book, “the wealth of nations.” In that book, he sets up a compelling argument for capitalists. He further talks about the invisible hand and the free market system, which allows capitalism and markets to exist. Read further to discover the two invisible hands that push the collectibles market.
Unregulated Collectible Market
The collectibles market, for the most part, is unregulated, and there are invisible forces that pull every collectible category in the trade. If you want to invest in the collectible trade, this is very important as it can help you predict an item that will have a substantial resale value in the future. Two total forces are prevalent in determining the flow of the collectibles market.
The First Force
The first force is speculation, and many investors consider speculation as the mother of all evils. Making money in the short term or long term in the collectibles trade is based on speculation. Many sellers and buyers decide on speculation.
Suppose you remove speculation from all different collectibles categories, and you remove the evil investors from the collecting category. In that case, the market could likely collapse, and the category would no longer exist. The reason why many collectible markets are going strong, even in the year 2022, is because of the existence of speculation.
Speculation attracts investors, dealers, auction houses, and grading companies to take an interest in collectibles, increasing their value. Without them, the market will no longer exist. Very few buyers today have sentimental value for a collectible, and they are mostly buying based on speculation.
The Second Force
The second force that dictates the collectibles market is fear and greed. Much like Wall Street, this force acts the same way. In the 1980s, Wall Street came into the market with the advent of third-party grading and rare coins. That market was subject to manipulation; however, in the years 2021 and 2022, the market for rare coins is still solid.
You can invest in rare coins today, and that market can display a bright future. Many people pour their money into rare investment-grade coins. On the other side of the equation, people saw a massive bubble appear in the aspect of beanie babies, which was a collectible market that investors were manipulating.
Mass speculation entered the market, and the market crashed. Rare coins are still going strong despite similarly being subjected to manipulation. Why? Well, that market has plenty of organic collectability and scarcity. Another factor for their successful run is that they are historic. Thus, the fear and greed factor can indicate whether a collectible market will last long or be short-lived.
Final Words
If you have collectibles such as coins, play cards, non-sports cards, jewels, or antique video games, contact Collectibles Investment Group, the leading online items dealer in the US, as we evaluate collectibles and provide accurate estimates.
Learn more about us and submit your questions and comments to cash@collectiblesinvestmentgroup.com.
