I have to disagree with that, cash isn't as anonymous as bitcoin. Cash is person to person transaction which the government can easily identify where all your money goes just for asking and reviewing all your movements, unlike in bitcoin? You could create thousands of wallet in several clicks, transact seamlessly without anyone knowing that you are already doing it. Cash will be only anonymous when you transact with your eyes closed, you forgot that government has all the power.
You are partially right, but you can make 100 transactions with cash, peer-to-peer, and nobody would have any ledger where all of them are recorded. That's the main difference - Bitcoin txs are recorded, validated and represent an undeniable proof that your address indeed has had transactions with another specific address.
My question is how could they do that? And also, living in the blockchain does not mean that you need to loosen your guard right?
If you go to an exchange (or any other service), use crypto to pay/exchange and you complete KYC or even some basic info forms, they'd very easily link the addresses to your name and any other info you (un)willingly gave away. That includes your IP, your e-mail address, your phone number etc. It's very easy to link these informations together and find a very accurate match for them.