Why use a service to hold your crypto if you need to then pay taxes on it's appreciation?

I'm a bit new to the crypto scene though own some coin stored on a Ledger device but recently bought Bitcoin and ETH on Fidelity. I've made some profits and am reading this IRS doc that says I need to pay taxes on those gains.

Crypto is supposed to be a commodity similar to any other like cash no? So if my Bitcoin goes up in value I have to pay taxes on that? But if the US Dollar goes up in value, we're all good. Makes little sense.

Bottomline, it seems using a service to hold your Crypto makes little sense if you expect it's value to rise. Storing your Crypto locally is more similar physical cash in your local wallet, right?

I'm seeing the convenience of purchasing via Fidelity is offset by having to pay taxes. But if I bought and stored locally, such as in a Ledger, NO taxes would be required to be paid because it's like the paper money in my wallet.

Am I understanding this correctly?