I'm not sure about Bitcoin being "untraceable, and very easy to hide," since Bitcoins take the form of a public ledger, so they're actually more traceable than cash. In theory you can thwart it by using a mixing service (you deposit into the service along with many others, then withdraw the same value but not the same coins), yet there's stories like this that suggest an aggrieved party (say someone who had coins stolen from them), can trace the money by sending micropayments that effectively tag it. (The Bitcoin equivalent of "slightly irradiated bills"). Each transaction in the ledger is also recorded and publicly viewable for all time, so even if the software for tracing transactions and matching them to real entities doesn't yet exist, the data will wait until it is.
keep in mind that bitcoin mixers make a point to not necessarily give you back the same coins that went in. tagging the coins would only reveal that they were in the mixer, and the person they end up with is only connected in the sense that they used the same mixer. yes, you have a problem when your input to the mixer severely dwarfs the rest of the pot, but as bigger mixers are implemented i imagine they'll keep a large amount of funds tumbling within the mixer at all times to mitigate that. and things like zerocoin solve the problem entirely.