The only major U.S. stock market strategist to issue bitcoin price targets is still betting on the cryptocurrency.

For a third time since bitcoin's plunge from a mid-December high, Fundstrat's Tom Lee published a report reemphasizing his optimistic outlook, after a heavy day of selling.

"It has been a terrible few weeks but the fundamental positive story for crypto remains intact," Lee said in the report, distributed late Thursday night. He was J.P. Morgan's top equity strategist before co-founding Fundstrat Global Advisors in 2014, where he is head of research.

Bitcoin dropped below the psychologically key $9,000 level Thursday and hit a low of $7,695 Friday morning, down 30.6 percent for the week and less than half its record high above $19,000 hit in December, according to CoinDesk. Worries of increased regulation and potential price manipulation at a major exchange have spurred a broad cryptocurrency sell-off in the last month, following massive gains last year.

But in his report, Lee maintained that bitcoin will more than double to $20,000 by the middle of the year, and roughly triple to $25,000 by the end of the year.

He pointed to five similar drops and subsequent recoveries "of similar magnitude" since the middle of 2016. "Past sell-offs were followed by rallies of ~150% within 84 days," Lee said. "In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside."

Bitcoin 12-month performance

Source: CoinDesk

Lee is also taking some cues from the bitcoin futures market. Contracts for coming months are pointing to higher prices, or "contango," Lee pointed out, which will encourage investors to hold bitcoin and sell the futures contract. That's in contrast to the negative sign of "backwardation" in the last few weeks, in which futures contracts for three months out pointed to a drop in bitcoin prices, Lee said.

The Cboe bitcoin futures for February delivery traded 5 percent lower near $8,630 Friday morning, while the CME bitcoin futures fell 4.8 percent to $8,655.

The surge of interest — more than 1 million people — in Robinhood's cryptocurrency trading product also adds support to Lee's thesis that millennial investors are going to help the development of cryptocurrencies as an asset class, the report said. No-fee stock trading app Robinhood says about 78 percent of its users fall in the millennial age category. The company is rolling out bitcoin and ethereum trading in five states this month.

Lee still expects ethereum to reach $1,900 by the end of the year, ethereum classic to reach $60, neo to hit $225 and the Bitcoin Investment Trust to hit $30. In order to reach those targets, ethereum would have to double, ethereum classic nearly triple, neo gain about 80 percent, and the Bitcoin Investment Trust more than double from Friday morning prices.