The Interesting $2 Dollar Bill Market

Op-Ed – Many people are introduced to the hobby of collecting United States paper money with the $2 dollar bill. An older relative might show one to a young collector; a shopkeeper might have one posted to the wall with the date his/her store opened; or your numismatic minded friend might keep one in his billfold as a pocket piece. If you’re willing to hunt around a bit or request a pack of $2 dollar bills at the bank, sooner or later you’ll have your first note to collect and save.

Only a tiny percentage of all United States currency printed is $2 dollar bills. Its relatives, the $1, $5, $10, $20, $50, and $100 note are produced in exponentially greater numbers, making the $2 dollar bill a bit of a mystery and rarity to the general public. It’s not uncommon to hear stories from people about a frustrating encounter with a grocery store cashier who wouldn’t accept a $2 dollar bill because it’s believed to be counterfeit currency. Some people will return them to their bank in exchange for “current” USA paper money, thinking that their $2 dollar bill is out of circulation. Still others will jealously hoard any $2 dollar bill they find: in many countries outside the USA, the $2 dollar bill is considered a good luck charm. It can be found for resale on many foreign bank note websites in vastly greater quantities than other denominations.

If you receive a $2 dollar bill in change from a reputable merchant or as part of a withdrawal at the bank, be assured, it is spendable, genuine and collectible!

If you like to visit, you’ll find the collectible United States paper money section dominated by $2 dollar bills. Some are rare and come from the hobby’s top dealers. Others are quite commonplace and are listed for sale by people with no knowledge of the hobby, thinking they’ve hit pay dirt. The $2 dollar bill is also frequently “re-made” with decals, overprints, or glued-on pieces of paper that put celebrities in Jefferson’s rightly owned spot, or make the bill look like it is made from gold leaf. In both cases, these bills are nothing more than novelty items and shouldn’t set you back more than $10. Any higher priced note with creative graffiti should be looked upon with skepticism.

All of these curious customs produce a sizable sub-market in United States currency that might be worth further examination. Although we’re not aware of any empirical data on the number of $2 dollar bills offered for sale on annually or sold to collectors from currency dealers, our guess is the number of $2 dollar bills turned over annually is probably greater in comparison to other denominations solely for the fact that is seen as an instant collectible and therefore market worthy.

Serious $2 dollar bill collectors wishing to put together a Federal Reserve Bank District Set of notes can do so with relative ease if willing to spend a little money. If you’re after a district set of $2 dollar star notes, you’ll have to pony up much more cash, but once a set is complete it is something both the collecting and non-collecting public will marvel.

One thing is for sure, the $2 dollar bill “market” is very fluid and affordable. Paper money dealers often acquire packs of $2 dollar bills directly from their bank and then resell them online. Major currency dealers often establish special relationships with commercial banks that allow them first dibs on any collectible USA currency that flows through the bank’s vaults. Other notes might be offered from the recent sale of a major paper money collection containing extremely rare $2 dollar bills. Finally, direct-from-the-Fed “Bricks” of $2 dollar bills also show up from time to time, offering the collector a unique opportunity to land a substantial number of $2 dollar bills all in a crisp uncirculated condition for just a little more than face value.

It’s also reasonable to assume that bulk sales and the constant ebb and flow of supply and demand make the $2 dollar bill one of the more liquid notes in all of USA currency collecting. Dealers with high-end merchandise – such as a 1934 $5,000 dollar bill – might have to wait months before a buyer comes along to purchase it. With $2 dollar bills, however, one can setup an auction in 10 minutes and sell their holdings relatively quickly if the price is right.

We believe this definitely warrants further study from someone in the paper money hobby with statistics experience and knowledge of the market. Understanding regression analysis would be helpful as well. The findings would be extremely fascinating, to say the least. Connoisseurs of the paper money hobby might find out that a business of selling mid-grade 1976 $2 dollar Federal Reserve Notes might be a profitable pursuit after all, creating a small but steady flow of income while more expensive inventory waits for collectors or the auction block.

The above is opinion and anecdotal research only. No scientific study was referenced in the formation of the aforementioned opinion, although someone with the knowledge and wherewithal to complete one would be welcomed! 🙂