Is Bitcoin trading anonymous and untraceable? I know little about bitcoin except they are digital currency.


I heard that bitcoin ownership or exchanges/trading is anonymous and untraceable by government. Is that true?
If I buy a bitcoin and pay by credit card, the money goes through banking system right? That would make it traceable wouldn't it?


Thanks in advance.

Appended: Thank you for the all answers that are informative. The reason I asked is because I heard that the underworld and money launderers etc. use bitcoin to evade governments' scrutiny which is part of the reason for its price soar. Guess there is no truth in that since transactions are traceable.
Bitcoin transactions are anonymous but traceable. Many wallets and exchanges are now linked to your bank account and ask you to furnish personal details beforehand. Hence, If needed they can trace you easily.

You can avoid it by buying BTC in cash.