Bitcoin is only pseudonymous. Inside the network everything is public and traceable, but not personally identifiable. Where you lose anonymity is with inflows

Bitcoin is only pseudonymous. Inside the network everything is public and traceable, but not personally identifiable. Where you lose anonymity is with inflows and outflows to the real world. You may only be able to buy cryptocurrency from a KYC seller. Or your payment can be traced. Or you buy something from an already identified seller. Ironically, a lot of the anonymity of Bitcoin comes from the anonymity of physical cash. If employers started paying out salaries using Bitcoin, it would suddenly be really easy to identify wallets.