An overnight surge in bitcoin prices reignited optimism among cryptocurrency watchers, and one of the biggest bitcoin bulls on the street says the crypto could more than triple this year.

"We still feel pretty confident that bitcoin is a great risk-reward and we think it could reach $25,000 by the end of the year," Thomas Lee, co-founder and head of research at Fundstrat, told CNBC's "Futures Now" on Thursday.

A march to $25,000 represents around a 225 percent increase from its Thursday price. Even if it retakes its December highs, the target implies at least 25 percent upside. Bitcoin traded at around $7,662 by midafternoon Thursday.

The leading cryptocurrency has had a worrying start to the year after hitting a record in mid-December. Even after Thursday's surge, prices remain 61 percent below those highs.

It is past time bitcoin recouped those losses, Lee said.

"It's overdue. Bitcoin was incredibly oversold," he said. "When you look at metrics like price-to-book, which is 'money cost,' or our bitcoin misery index, it's pretty much what you saw at the end of the 2014 bear market, not the start."

Bitcoin fell into a bear market over 2014 and 2015 after Mt.Gox, a bitcoin exchange, suspended trading and filed for bankruptcy. Prices hit a bottom in mid-January 2015. Current levels are around 43 times greater than at that low.

But recent price weakness through the tail end of March and the first half of April may have revived fears of a prolonged downturn. Lee says those fears are unjustified – pressure on cryptomarkets was likely tied to the tax-selling season. Investors had unloaded some of their bitcoin holdings in the past few weeks to cover capital gains taxes tied to those positions, he said.

By his calculations, U.S. households owed as much as $25 billion in capital gains taxes on their cryptocurrency investments. With Tax Day of April 17, which is later than usual this year, just days away, that selling pressure has begun to abate.

April bitcoin trading formed an important technical reversal that suggests further upside ahead, according to Fundstrat research. Bitcoin steadied above $6,500 in the past two weeks, presenting a level of support and breaking through the March downtrend resistance. Fundstrat sees the next major resistance band around $9,000.

Bitcoin leapt nearly 11 percent higher Thursday. At one point early in the day, prices surged more than 17 percent to top $8,000. The last time the cryptocurrency moved above that level was March 28.