Yes obviously, but I am posting the perspectives of government, not what's actually the case. How is bitcoin a privacy coin when the blockchain is public and 99% of transactions are not layer-2?
Bitcoin is not an
anonymous coin but it provides a very high level of
privacy.
This means you can see all the transactions on the blockchain transparently but you have no way of knowing who each of the transactions belong to or where they are going to (unless of course the people intentionally or naively link it to their identity and purpose).