Here’s a brief primer on what makes a coin valuable:
Age #
How old is it? In general, old coins tend to be worth more than coins struck more recently. The older a particular coin is, the greater the collectible and historical appeal. Older coins also tend to be scarcer, as many coins are lost or destroyed over time.
For example – 5% of the original mintage of an 19th century U.S. coin might have survived to the present day, with the rest getting melted down, destroyed, or simply lost over time.
Go back a century further, to the 18th century, and the survival rate drops to <1%. Taking into account that most 18th century U.S. coins were already produced in tiny numbers, it makes sense that most of them now sell for over four figures.
All that being said, the relationship between age and value does not always hold true. For example, you can still buy many 2000 year-old Ancient Roman coins for less than $10, due to the sheer number of them produced over the 400-year history of the Western Roman Empire (and distributed across its massive territory).
But as a general rule, within any given coin series, older coins will tend to be relatively more scarce and valuable.
Condition #
It may sound like common sense, but nicer coins bring higher prices. The greater the amount of original detail and the smaller the amount of visible wear on a coin’s surfaces, the higher the price. There are a dizzying array of words used to describe a coin’s condition, but at the most basic level, coins can be divided into two states – Uncirculated and Circulated.
Uncirculated or “Mint State” coins are coins that show no visible signs of wear or use – they have not circulated in commerce, but are in roughly the same condition as when they left the mint. Circulated coins show signs of having been used – the design details will be partially worn down from contact with hands, pockets, and other coins.
The level of wear can range from light rub on the highest points of the coin’s design, to complete erosion of the entire design into a featureless blank. Uncirculated coins demand higher prices than circulated coins, and circulated coins with light wear are worth more than coins with heavy wear.
Type #
Type is the single biggest determinant of value. How much a coin is worth depends on how big the market for that particular coin is. For example, U.S. coins are much more widely collected than any other nation’s coins, just because there are far more U.S. coin collectors than there are collectors in any other nation.
The market for American coins is bigger than any other market within the field of numismatics (other large markets include British coins, ancients, and bullion coins).
This means that even if a Canadian coin has a mintage of only 10,000 coins, it is likely worth less than a typical U.S. coin with a mintage ten times greater. For another example – you may have a coin from the Vatican City with a mintage of 500, but it’s only worth something if somebody’s interested in collecting it.
Certain series of coins are also much more widely collected than others, generally due to the popularity of their design or their historical significance.
For example – Jefferson Nickels have never been very popular in the coin collecting community, as many collectors consider the design uninteresting and the coins are made of copper-nickel rather than silver, but Mercury Dimes and Morgan Dollars are heavily collected.
An entire date/mintmark set of Jefferson Nickels can be had for a couple of hundred dollars, whereas an entire set of Mercury Dimes would cost four figures.
Rarity #
Rarity is comprised of all the other factors above combined. Age, condition, and type all play a role in rarity. But the main determinant of rarity is how many coins were actually minted (produced). Coins with certain date/mintmark combinations might be much rarer than others because their mintages were so small.
For example, U.S. coins with a “CC” mintmark are generally much rarer than coins from the same series with other mintmarks because the Carson City Mint produced small numbers of coins during its existence.
U.S. coins without a mintmark, from the Philadelphia mint, are generally less valuable (though there are many exceptions) as the Philadelphia mint has produced more coins throughout U.S. history than all of the other mints combined. There are often one or two “keys” or “key date” coins within each series of coins, much scarcer and more valuable than the rest of the coins within the series.
Some of the most well-known key dates include the 1909-S VDB Lincoln Cent (“S” mintmark = San Francisco mint), the 1916-D Mercury Dime (Denver mint), and the 1928 Peace Dollar (Philadelphia mint).