Probably a stupid question and I'm guessing the answer is yes, but you would you still need to pay capitol gains on the increase in value from when you purchased it?
Yes, both the purchaser and seller would need to pay capital gains taxes on the realized appreciation in the digital asset and real property, respectively.
Even cryptocurrency x into cryptocurrency y exchanges are capital gains events, so cryptocurrency into real estate is absolutely one such.
Either capital gains tax or income tax, depending on how long ago you purchased.