Why would you report something that does not exist.
You can’t touch it. You can’t put it your safe at home. It’s does not exist
Period
Doesn’t matter if it exists.
If you sell something that doesn’t exist for more than you paid for that thing that doesn’t exist , you owe capital gains taxes.
“Why would you report something that does not exist.”
same reason you must report cap gains on trades for other intangible “investments” such as options, futures, futures options for things like electricity and other intangible goods and service, etc. Those things have about the same amount of “existences” as bitcoin.
Bitcoin isn’t really a currency, anymore than is gold or silver is a currency, and trading between dollars and Bitcoins, gold or silver will result in a profit or loss.
And even it if bitcoin WAS a currency, the government would consider trading profits to be the same as if trading in a foreign currency. That is, if one purchases UK pounds with U.S. dollars and then sells the the UK pounds for more dollars than one originally paid, then one has made a capital gain in dollars.