Why Are Silver Dollars Valuable? August 12 2013
You may be asking yourself, what's the point of spending $40 or more on a coin with a face value of only $1?
Yes, it's true, if you take a silver dollar on your next grocery shopping trip you'll be able to buy little more than a couple candy bars or maybe a small bag of Cheetos. But if you decide to waste your silver dollar by spending it, you've just made a huge mistake.
Silver dollars have two main sources of value: bullion value and collectible value.
Bullion value is the value of the silver within a silver dollar. Each American silver dollar, including the Morgan silver dollar and the Peace silver dollar contains approximately .77 troy ounces of silver.
When silver dollars were originally made, the price of an ounce of silver was less than $1. During the early 20th century, American silver mines began to dry up while demand for silver steadily rose. The result? The price of an ounce of silver rose above $1, making it impossible for the government to produce any more silver dollars without losing money on each one. Even the government eventually realized that continuing to produce silver dollars was a bad idea.
Since then, more and more silver dollars have been melted down into silver. As the price of silver continued to rise from the 20th century up to the present, millions and millions of silver dollars found their way into metal refineries, where they were melted down and refined into pure silver. As I write this, the current price of silver is about $22 per ounce. After a meteoric rise over the past few years, the price of silver has temporarily cooled down this summer. Now is the perfect time to invest in silver and silver dollars. The price of silver is project to only increase from here on out due to increasing industrial demand. If you buy a silver dollar now while prices are low, you'll earn even greater gains as the price of silver rises.
Collectible value is the value of a silver dollar to collectors. Silver dollar coins have immense collectible value for a variety of reasons: they're historical artifacts that provide a physical connection to a different era, they're beautifully designed works of art, and they're big freaking chunks of silver! Silver dollars have always been some of the most desirable coins to collectors. Holding a large silver dollar in your hand lets you really imagine all the people who used it at one time or another. Silver dollars are a particularly exciting coin in that respect, as they circulated most heavily throughout the Wild West. Cowboys, outlaws, and all other sorts of characters may have spent the very coin you now own.
Because of their high collectible value, silver dollars have continued to increase in price over the years. The millions and millions of silver dollars melted down mean that the remaining coins have become even more valuable to collectors! As the remaining supply of silver dollars diminishes and dwindles, the price of silver dollars will only rise. The sooner you buy, the better.
And please, next time you want a bag of Cheetos at the store, put it on your credit card.
Read our companion blogpost, How Much Are Silver Dollars Worth?
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