Are bitcoin wallets traceable? Yes, bitcoin wallets are totally traceable. Bitcoin's blockchain is open to anyone, and this is part of why it is such a great system.
Bitcoin is anonymous in the sense that transaction take place between two wallets, and there are no names associated with the wallets.
The wallets will send and receive bitcoin, and these transactions will be written into the blockchain forever. That is why bitcoin works, the record on the blockchain is permanent, and once created, can't be changed.
In fact, all the bitcoin transactions that have ever taken place can be traced back from wallet address to wallet address.
When it comes to tracing who actually owns a bitcoin wallet, things become more complex. Anyone can download a software wallet for bitcoin and as long as someone sends them bitcoin, they can use the system.
There is no KYC process to use bitcoin, and the blockchain is open to anyone, anywhere in the world.
This creates some amount of anonymity, but once bitcoin is used to buy something that has an ID connected to it, like a physical product, or fiat currency, there will be a name connected to the bitcoin wallet.
Once the ID is connected to the bitcoin wallet, everything will be traceable.