The Ledger: Where the Rarest Coins Gleam

In billboard-laden New York City, the boutique’s beige awning barely snatches a glance. “Stack’s Rare Coins,” the signage advertises above a gilded, vending machine-sized ATM offering “gold to go.” Inside the entranceway and through a vestibule, the narrow boutique smells like a museum, looks like a lepidopterist’s showroom, and feels like Ollivander’s wand shop.

I visited this odd nook—Stack’s Bowers Galleries, a collectible coin retailer—to behold a precious specimen earlier this month. Upon entering, my eyes were drawn to the contents of the hall’s glass-covered wooden display tables. They contained specie from all corners of the ancient world—Thrace, Turkey, Rome, Carthage, Greece. A pebble-sized coin minted eons ago featured a miniature cameo of Alexander the Great, coldly gazing down the centuries. His sideways glare, fixed on an unseen horizon under an upturned helmet, yet glinted. The golden stater may as well have spoken, Look on my works, ye mighty…

Viewing an engraved portrait of the Macedonian conqueror was not the purpose of my sojourn. I was here to see a nickel. Not just any nickel—a very special nickel. A nickel that had appreciated in value by a factor of roughly one hundred million in the century since its creation. (For the nit-pickers: a factor of 3.5 million, if adjusting for inflation.)

Vicken Yegparian, Stack’s Bowers vice president of numismatics, brought me into his back office where he furnished the coin: a 1913 Liberty Head nickel. It is one of five known in existence, Yegparian told me, and this was the finest example of the lot. (No one knows the coins’ precise origins, although several theories exist—including one that involves employees at a U.S. mint going rogue.) As a booklet in my possession states, “Likely, there is no more famous single coin in existence anywhere!”

I was surprised my chaperone let me handle the curio. I picked it up and turned the New Colossus’s stoic face over in my hands. A serifed “V” revealed itself on the reverse side. For protection, the coin was encased in a rectangular, plastic shell—a sturdier version of the translucent sleeves I used to guard the Magic The Gathering playing cards I traded in my youth.

This week that nickel sold at auction to an undisclosed buyer for more than $4.5 million. One some level, it amazes me that someone would pay such a sum for a tiny piece of metal. But should I be surprised? We are strange creatures, ascribing value to all manner of seemingly arbitrary items over the course of our history: shells, beads, stones, metals, and math. While inspecting the Liberty Head nickel at Stack’s, amid the wealth of civilizations long past, I could not help but ponder the fate of another currency, one made of a different metal: Bitcoin, that silicon-struck seigniorage. Will it endure, even as cryptocurrency prices plummet across the board, as they have throughout 2018? I wonder what the years ahead may yield—and beyond that, the decades and the centuries.

Your guess is as good as mine. The Liberty Head nickel will continue to appreciate, I suspect, as long as people like Yegparian are around to marvel at its rarity.

For a numismatist, this is as close contact one may ever have with the numinous. At least on this earth.

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DECENTRALIZED NEWS

To the moon... Coinbase acquires identity startup. Goldman and JPMorgan invest in enterprise blockchain. Square Cash tops PayPal's Venmo. JD.com rolls out blockchain platform. Women get blockchain mentors. Sweden offers something like a Bitcoin ETF. Zcash improves. Crypto miners are rallying. Chinese artist Ai Weiwei digs Ethereum. South Korea earmarks a trillion won for blockchains. WSJ profiles the guy who solved Mt. Gox.

....Rekt: Ethereum plummets. AT&T sued. Hedge funds face tax headaches. Twitter pumps scambots. SEC issues cease and desist, and says don't bet your retirement on crypto. FinCEN is overloaded with crypto complaints. Venezuelan inflation is really, really bad. Coinbase CEO says don't hold your breath on crypto payments. FBI warns of ATM hack. Mark Cuban-backed crypto betting startup faces class action lawsuit. Shipwreck wrecks investors.

BALANCING THE LEDGER

Balancing The Ledger is on vacation this week. In its place, here's Fortune's Robert Hackett interviewing Circle CEO Jeremy Allaire and Ripple's then-chief cryptographer, now-tech chief David Schwartz at a fintech event in Dublin earlier this year. We talk about what crypto has that the euro doesn't, and what sets Ripple's XRP apart from other virtual tokens. I recommend skipping to 15:40, where the action starts.

BUBBLE-O-METER

How low can you go? Cryptocurrencies continue to crash. The market has lost the entirety of the eye-popping value it racked up through a remarkable bull run that began in Nov. The price of all coins, in aggregate, has drooped now near $200 billion from highs above $800 billion in Jan., per CoinMarketCap. On Tuesday, Bitcoin's price dropped below $6,000 to the lowest point it has slumped since June.

Bloomberg asked Samson Mow, chief strategy officer at Blockstream, a Bitcoin development shop, for his thoughts on the pull-back. "Most cryptocurrencies have been overvalued for a very long time," he said. "[I]t feels like the opposite of last year when money piled in as people felt FOMO. Now it’s piling out as they sense panic.”

MEMES AND MUMBLES

Kiss inbox zero goodbye. It seems like everyone is starting a crypto newsletter these days. John Collins, partner at FS Vector, a financial services advisory firm and former policy head for Coinbase, poked fun at the proliferation of email-emitting entrepreneurs in a recent tweet.

To be sure, you have chosen wisely, dearest and most discerning reader. The Ledger commends your selection. 😉

FOMO NO MO'

Don't miss out: Need a pick-me-up while Bitcoin's price sags? Vijay Boyapati, an ex-Googler who now writes software for Peach, a food delivery startup, penned a screed that lays out the bull case for Bitcoin. If you've got time to spare, the essay is a great, if long, overview of the crypto-optimist's view. The piece clocks in at a 41 minute read, per Medium's time gauge, so get ready to hunker down. It's time for some game theory, as they say.

Owning bitcoins is one of the few asymmetric bets that people across the entire world can participate in. Much like a call option, an investor’s downside is limited to 1x, while their potential upside is still 100x or more. Bitcoin is the first truly global bubble whose size and scope is limited only by the desire of the world’s citizenry to protect their savings from the vagaries of government economic mismanagement. Indeed, Bitcoin rose like a phoenix from the ashes of the 2008 global financial catastrophe — a catastrophe that was precipitated by the policies of central banks like the Federal Reserve.

We hope you enjoyed this edition of The Ledger. Find past editions here, and sign up for other Fortune newsletters here. Question, suggestion, or feedback? Drop us a line.