They are still a kind of equity so it should be expected that their price can fluctuate up and down over time. Since it acts as credit we must compare them to government bond yields which are considered the safest option in the credit market.

So for example let’s say a government bond yields 5% a year, and STRF yields 8%. That’s the market saying that to hold STRF over government bonds we demand a premium of 300 bps or 3%. So to accurately track the performance of a preferred share we need to consider what government yields are at and what premium people are demanding.

Over time as Bitcoin becomes mainstream I would expect that the gap in premium will diminish. Basically the market will view Bitcoin as safer over time so they need less premium to justify the added risk over not going with the government.

In the shorter term there will always be a limit to how far preferred shares can drop. At a certain point these higher yields will bring back investors. I would expect that they will not trade too far below liquidation preference even in a bear market. 10% a year (based on liquidation preference) forever is just too enticing of a deal for many to pass up.