Tax treatment of cryptocurrency varies by country and several principles appear in most jurisdictions. Knowing the shape of the rules prevents unpleasant surprises.
What usually triggers an event
Selling for conventional currency, which realises a gain or loss.
Trading one cryptocurrency for another, which in most jurisdictions counts as disposing of the first. This surprises people who assume nothing happened because no currency was involved.
Spending it on goods or services, treated as a disposal at market value at the time. Buying coffee with appreciated crypto can generate a taxable calculation, which is one reason crypto payments never took off.
Receiving it as income – payment for work, mining, staking rewards – typically taxed as income at the value when received, and then subject to capital gains on subsequent disposal.
What usually does not
Buying and holding. Moving between your own wallets. Though the second requires records to prove it was not a disposal.
The record problem
Calculating gains requires knowing the acquisition cost of what you disposed of, which after many transactions across several platforms is genuinely difficult to reconstruct.
Exchanges frequently do not provide adequate records and may close. Exporting transaction history regularly is the practical defence.
What to keep
Date, amount, value in your currency at the time, what it was, and the counterparty or platform. For every transaction.
The strong caveat
This describes general patterns, not the rules of your country, which may differ substantially. Anyone with meaningful holdings should talk to an accountant familiar with the local treatment rather than rely on general reading.