To play devil's advocate: cash (fiat in general) is often traceable to bank accounts, wire transfers, ATM CCTV, credit card records, marked bank notes, etc.

While it's still v possible to track a bitcoin transaction from recipient to sender, there are countermeasures with varying degrees of efficacy. At any rate, it's not the traceability of X per se that matters, but rather the stigma, and given how many billions of $ in illegal activity bitcoin has been used for, and the high-profile cases of Silk Road etc, it's very easy to see that scenario (i.e., the US Congress + interested lobbyists cracking down on Crypto) happening.