The core focus of early crypto was decentralization, not anonymity. Bitcoin is totally decentralized, but the entire premise is the blockchain contains a permanent irrefutable ledger of transactions. Basically everyone knows if Wallet A paid Wallet B. If you refill your wallet with anything remotely traceable, that means everyone knows YOU paid Wallet B, and similarly if wallet B has any ties to the real world, the lines are easy to connect.

That's not to say you can't use it anonymously, but that was not the intent and thus it does anonymity poorly.

Monero is built as a privacy first crypto. Essentially it's like cash in many ways. You spend it in the shop and nobody knows where the cash you're handing over came from. When you get your change at the till you know nothing about who had the cash before you that you just got handed. It's just money.

This is all handled by a bunch of very complex cryptography. If it comes to it there are ways to prove you sent the money etc but only you have that capability to decide to share.