Nickels are the conservative buy to copper pennies as the weight of the coin is greater than a copper penny so there is more metal, but the face value means your cost per coin is greater (five times so).
The primary buyer of this particular coin bullion product type and and size has traditionally been hedge funds looking for a physical, yet low-cost, bullion hedge option to the futures market.
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Nickels are ideal for the investor looking to gain the maximum “face value insurance” on their investment. Face value insurance means that the nickel is worth five cents ($0.05) and will never be worth less than five cents to the dollar, giving you a higher backup plan than a copper penny, which is never worth less than one cent to the dollar.
Consider investing in nickels to be the ultra-safe method of investing in the copper market while being backed by the value of the U.S. dollar in the form of the five cent nickel.
You won’t get nearly as great a return as copper pennies, however, the nickel and penny weigh nearly the same amount in copper, except with the nickel, you will have more security knowing you can turn in each coin for five cents as opposed to one cent. Meaning, your floor value is significantly higher, five times, that of the penny.
The nickel also has the distinct advantage that it is greater in cost than the penny, yet also more useful in transactions. If the penny was eliminated, the nickel has a greater chance of becoming not just a heavily used coin, yet also a potential composition change.
If the nickel composition changes, the cost to provide nickels to the public as a physical bullion investment significantly rises due to having to run industrial coin sorting equipment to sort the “bad” nickels from the good ones. So this type of low-cost future investment is presumably very limited on further supporting evidence of an upcoming nickel metal composition change.