Comment by basilikum

Bitcoin ist pseudonymous. If you never attach your real identity to your Bitcoin you remain pseudonymous. Now that's a very big if and why states heavily try to enforce KYC for exchanges.

The reality is a lot more messy. Different chains have different properties. Things like CoinJoins for Bitcoin or TornadoCash for Ethereum exist which aim to break the money trail. Mixers are a thing which are a trusted entity doing the same on a "trust me bro" basis.

Monero seeks to be untracable by design using zero knowledge proofs and ring signatures over multiple possible sources for every transaction.

Even with standard Bitcoin it's more complicated. One time change addresses make tracking harder. Say I send you 1 BTC in a transaction. Now you want to spend 0.5 of these Bitcoin. However with Bitcoin you can only ever use an incoming transaction in full. Every transaction has a number of inputs (a previous incoming transaction) that it spends and a number of outputs. An output can only be unspent or spent. The amount of the outputs must match the amount of inputs. So what you do is you use that input of 1 BTC and create two output of 0.5 BTC each. One is to the recipient address and one is to an address of your own (the change address). If you create a new change address for every transaction nobody but the recipient can know which output belongs to the recipient and which is your change address.

In reality that is a weak defense and there are many usage patterns (e.g. one output being a round number and the other one not) that can give away which one the change address is.