the illusion is that its as anonymous as cash. but in fact its cash with a record of everyone who touches that cash.
That about sums it up. As long as the transactions are saved FOREVER on the blockchaon there is no anonymity guaranteed.
Correct, but...
By canny use of BTC mixing, using multiple addresses in creative ways, localbitcoins and other guerrilla tactics, you can be "pretty safe", that is, resistant to almost attacks on your Bitcoin and balances.
Only
.gov and (perhaps) the most sophisticated attackers could get your BTC (or even know current holdings) by smart privacy practices.