Bitcoin Forum

So since bitinstant went down i've heard so many good things about bitfloor and thought i'd give it a try. I went to Bank of America this morning and

deposited $1,000 USD for only a $7 fee!! and went to my account in 5 minutes, I was already loving bitfloor. then when it came to trading USD for btc I

noticed bitcoin on bitfloor was $10 more than mt. gox's price for btc! so basically for $1,000 after depositing it into my wallet which uses mt. gox's price

for bitcoins i ended up with only $882... so my question is, is there anyway I can get more btc for my money on bitfloor or should I just go back to using

bitinstant and mt. gox??

Well, BitFloor doesn't set the price.  The price you pay depends on what other traders are willing to sell their coins at.  

If you were patient and put in a bid at a price, let's say $2 over Mt. Gox market price, you probably would have gotten your order filled within an hour or two.   Normally the difference between BitFloor and Mt. Gox is much smaller, and sometimes you can even buy below the Mt. Gox price.

So what you saw was the herd of people unable to use BitInstant all swarming the sellers on BitFloor.  So of course you ended up overpaying.

To get more sellers noticing the arbitrage opportunity, I used to see people announce their intentions (e.g., buy volume and what they were willing to pay) on a forum thread and/or in the #bitcoin-otc IRC channel.  That way sellers could have time to get coins deposited and put sell orders in to be able to score a nice trade.

So to summarize, your next transaction paying cash to buy coins at BitFloor will probably result in a better experience.  There is also BitMe.com which you could try.  They use cash deposits through Chase and have a different order book -- currently even lower than BitFloor's.

Thanks for the info thats exactly what I wanted to know!    ;D

Also note,  If you place a "Market Order" at BitFloor they charge you a 0.4% fee, but if you place a "Limit Order" to purchase at a lower price than the current BitFloor "Ask" price your order will sit there and wait for someone to sell to you.  When someone finally does sell to you, BitFloor will pay you a 0.1% bonus.  If you are not in a hurry, you can get closer to the price you want AND get a little something extra out of it for yourself.

EDIT: As of 2013-04-17 BitFloor has ceased all operations.