Copper Lincoln Cents as an Investment

In 1965, the United States Mint ceased creating coins made from 90% silver. Many people saw this as an opportunity to invest in a rapidly rising asset for just the time spent sorting through coins. The price of silver had been increasing quickly, nearly to the point in which it cost the government more to mint the dime, quarter, and half dollar. The decision was made to debase these coins by switching to a cheaper material. They switched to a nickel covered copper planchet and have been creating dimes, quarters, and half dollars from this ever since. Gresham's Law, as stated in the Encyclopedia Britannica, states that "bad money drives out good", that is, if you replace a more valuable currency with less valuable currency, the more valuable one disappears. That's exactly what happened.

Fast forward seventeen years and the government did it again. This time, copper Lincoln cents were quickly approaching the point in which one copper cent contained exactly or more than one cent's worth of copper. In 1982, midway through the year, production of the copper Lincoln cent stopped, and the United States Mint switched to a copper plated zinc planchet, the metal value of which was a tiny fraction of a cent. As copper prices leveled off and even declined, we didn't see a rapid reduction in the number of copper Lincoln cents in circulation. In fact, even today, decades later, a random sampling of a handful of pennies will find that roughly 20% or more of them are the old copper type. However, these days, the chances of finding a silver coin amidst your dimes, quarters, or the rarer half dollar, is slim to none.

In 2008, however, things began to change for the copper Lincoln cent. Due to skyrocketing copper prices, copper Lincoln cents began to approach a metal value of three cents each. Rumors on penny hoarding message boards began to spread that companies such as Coinstar, which accept large quanities of coins and allow you to exchange them for paper currency for a fee, were secretly running massive sorting operations and were quietly pulling copper Lincoln cents from circulation. Craigslist and Ebay started filling up with offers to buy and sell $25, $50, and hundreds of dollars worth of face value copper Lincoln cents at multiples of face value. The hysteria ebbed and things have largely settled back to the point where the copper Lincoln cent is worth between a range of one and a half to two cents each in metal value.

Why are they still out there, when silver coins disappeared seemingly overnight? Well, there's several reasons. One: it's actually illegal to melt copper cents. Fearing that investors would do exactly that, before a sizable amount of replacement zinc Lincoln cents could be put in place, the government outlawed the melting of copper Lincoln cents, as well as nickels. It's also technically illegal to ship them out of the country in large quantities to somewhere that they could be melted. The government did the same with silver coins until they built up enough of the nickel plated copper coins in circulation. There's also the matter of bulk. $100 face value of copper Lincoln cents weighs about 68 lbs, and takes up more than a cubic foot of space, all for a current worth of about $200. In comparison, an equal weight of silver would be worth in the tens of thousands of dollars. An equal weight of gold would fetch over a million dollars. Time is a factor too. It takes time to sort through pennies to pick out copper Lincoln cents. Although, this can be easily sped up by purchasing a sorting machine.

If you've got a desire to 'get in on the ground floor' so to speak, and have the room, you can sort and hang onto them for a time when they are worth more, or sell them on one of many online venues for 1.5 times face or whatever the current value is. There are still rarer coins to be found when searching through large quantities of cents. Indian head cents that are more than 100 years old are still being found on occasion. Lincoln cents from 1958 and earlier with wheat ears on the back are worth between 4 and 5 cents each currently, and many rarities among those exist that can be worth anywhere from a couple of dollars to several thousand dollars.

Currently, it's a matter of speculation. Eventually, as copper prices continue to rise with increased global demand, the government will lift the melting ban on copper coins, just as they did on silver coins. When that happens, they will disappear quickly. Until that time, it's a cheap hobby.

"Gresham's law", Encyclopedia Britannica