Of-course yes. though it can be controlled and monitored. Sometimes it can go beyond being controlled with detriment to the society. It was reported to be in exchange in some latest crime in Germany but why would such a good resource be involve in dastard act.
well it can be if bitcoin wasnt used with something additional, if it was it might be untraceable
When you are using bitcoin into something illegal the government will really pursue and hunt you even if we are using bitcoin, the system can be traceable and there are a lot of factors that they will do to trace you, remember you are messing with the government.
Governments can go do unspeakable things with themselves. They're the one using currencies (their own national currency as well as bitcoin, and whatever other asset or commodity they wish to trade) for illegal activities the most. Lets not kid ourselves that governments are anything benevolent, especially in the state that at least some of them are in.