It was originally worth five shillings but Australia’s rarest coin, believed to be discovered in a bushranger’s hoard, is on the market and expected to fetch more than $500,000.

For the third time in its history, the “Hannibal Head” holey dollar, discovered in Tasmania in 1881, and presented to the Governor of Van Diemen’s Land, Sir John Henry Lefroy, is being sold by Melbourne coin house Coinworks.

The sale comes almost four years after a second Hannibal Head coin was stolen from the State Library of NSW in a brazen heist that netted hundreds of thousands of dollars worth of rare coins.

The Hannibal Head is believed to be one of 300 ‘holey dollars’ still in existence.

The holey dollar’s rich history

Holey dollars became Australia’s first currency when Governor Lachlan Macquarie imported around 40,000 Spanish silver dollars in 1813 from various parts of the Spanish empire.

Concluding that the shipment of 40,000 coins wouldn’t suffice, Macquarie decided to cut a hole in the centre of each dollar, thereby creating two coins out of one, a ‘Holey Dollar’ worth five shillings and a ‘Dump’ worth 15 pence.

Coinworks director Belinda Downie told The New Daily the coin’s estimated market price of $500,000 was fairly valued.

“This pricing has been based on market activity and its current valuation is in line with that,” Ms Downie said.

Governor Lachlan Macquarie imported 40,000 Spanish silver dollars in 1813. Photo: Getty

Ms Downie said rare coins had a tangible connection to history and holey dollars embodied the story of its time.

“This is the only coin of its kind and collectors of rare coins often are as passionate about history as they are about coins.”

The upside to collecting your loose change

Ms Downie said people passionate about a particular area of history should pursue interests in collecting.

“Quality is always a good rule of thumb and collectors can start off by buying a $20 piece and then go from there to stretch their budget.”

She said commemorative coins were a massive boost to the coin collecting industry.

“The Olympic Games and the wedding of Prince Harry and Meghan Markle are examples of these type of commemorative coins.”

Ms Downie said the 1930 penny was a classic rarity.

“We’re selling used 1930 pennies for about $25,000 because it’s a classic coin from the depression and there were only 1500 believed to be accidentally minted.

The 1930 penny is worth $25,000 today. Photo: Coinworks

“It’s a wonderful coin because it’s not an elitist coin but it reflects men on the street from that era.”

Macquarie University’s Australian Centre for Ancient Numismatic Studies director Kenneth Sheedy said collectors should undertake thorough research before purchasing rare items.

“If you don’t have any expertise in the area find somebody who does. It’s important to purchase from a recognised dealer,” Professor Sheedy told The New Daily.

Collectors should tread with caution when looking to purchase items from online dealers, he said.

“People need to be able to see and test the fabric of the object and you can’t do that on eBay and other online sites.”

The art of collecting was more about history, rather than a financial investment, Professor Sheedy said.

“I always tell students and collectors if they’re going to buy something, they should most importantly have an intellectual connection with it.”