What many crypto 'traders' will have done is put whatever gain they made straight back in and many will have subsequently lost it. The moment you realise any gain is when it's taxable and you need to secure that there and then. A frenzied trader could have made tens or hundreds of taxable events every day. Each one counts.

If you don't keep on top of that then you can wind up with nothing and a tax bill that still runs in millions of dollars. I've seen a few cases of this now.

https://www.reddit.com/r/tax/comments/9tcnu8/did_i_ruin_my_life_by_trading_crypto/?sort=confidence
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Oh my god!! Read that reddit thread. The poor guy never converted anything to fiat but incurred tax liability simply because of the "Portfolio value in USD" number against his account moving to 880K on coinbase!! How isn't that insane?? From what i understand, every single trade (crypto-to-crypto) or (crypto to USD) is a taxable event on these "exchanges". And with the "exchange" providing a full record of every single one of your transactions, the taxman seem to have hit the jackpot. They are milking people against gains that actually NEVER materialized.

Why isn't there more push-back against this? I guess plenty of people in the Late 2017 pump and dump would have incurred such taxes. I understand the basic concept that every single act of "buy and sell" is something for which you owe the govt tax. That is insane for people who started investing in late 2017, saw a short boom and then had their portfolios wiped out subsequently.

Thanks for your answers @gentlemand and @squatter