But that is semantics and depends on your definition of what is realized. Imagine you buy a house for $50000 and it is later valued by an appraiser at $70000. Is that a realized gain? Probably you would say no.

Let's say you trade that house for another house that is selling for $70000. Now is it realized? All you have is a house, you don't have an extra $20000 in cash. But if it is realized, then you have to come up with the cash from somewhere to pay your taxes. The only difference with crypto is that it is liquid and easier to sell part of it. But ease of selling has nothing to do with realization. Trading the house for a more valuable house is realized just as much as a crypto for crypto trade is realized.

In any case, the IRS has never stated that crypto to crypto is taxable. It stated that exchange of virtual currency for property is taxable.