> one could argue that there is no “liquidity” event by trading one crypto for another. But perhaps the IRS argues there is a phantom liquidity event during such a trade.

This is called a "like-kind trade" which is IMO muddy for cryptocoins [1].

EDIT: oh yes, I see now that you cite 1031, oops.

[1] https://www.forbes.com/sites/tysoncross/2018/02/19/the-truth...