Yes, you will have to post it as an additional transaction.
You withdrew the money from your 401(k), and it sounds like you entered that correctly.
You then essentially purchased (exchanged) the cash for cryptocurrency.
When you exchanged it back into dollars it happened outside of the 401(k).
This is a new taxable event and you will have to post the transaction.
Traders report their business expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).