The sales proceeds figure, as defined in your tax forms, is simply “the amount of money you received in exchange for selling your shares this year.”
The cost basis is amount of money you paid to purchase the shares that are being sold, with possible adjustments for wash sales and non-dividend distributions.
Your sales proceeds and cost basis on your 1099-B may be much higher than your Betterment balance was at any given time, because these proceeds represent the total amount of cash proceeds from the sale of securities, even if said proceeds were then used to buy securities again.
Here's an example. Let's say you purchase a fund for $500. Your cost basis begins at $500 because that is what you originally paid.
Let’s say the fund increases in value, and later you sell it for $700. Your net gain is $200, but your proceeds are $700 because you received $700 in exchange for selling the fund.
After that, say you purchase more of the fund for $600 dollars and sell it when it’s value decreases to $500. Your net loss is -$100 for that transaction, but your proceeds are $500 because you received $500 in exchange for the sale of the funds.
Your balance may not have exceeded $700 (the highest it was before you sold the fund), but your total "gross proceeds" are $1,200 ($700 + $500) because it represents the amount of total money that you received whenever funds were sold during the year.
Rebalances, allocation changes and tax loss harvesting can all increase your aggregate proceeds and cost basis to many times what your balance was during the year, but it’s really the same funds being used. The important number, for tax purposes, is the difference between your overall cost basis and proceeds, not either of number on their own.