It’s not a horrible problem. Most of us will use Bitcoin responsibly, as a store of value. In some way, it’s OK that they can track the fact that some entity sent a good deal of value to a not so good entity for a not so good purpose. They can’t stop the payment, but they can track it back to you. Would certainly give a bad person pause to use Bitcoin for any illegal activities. Absolute privacy in any system is a myth.
Discussion
Capital gains tax on money is a problem.
Agreed, but the Bitcoin Main Chain should be looked at like a savings account. Use it to store funds. Lightning is a spending account. Move funds from the main chain to lightning as needed for spending funds. Hopefully their will be favorable legislation to allow for no capital gains on spends up to some reasonable threshold.
In lieu of such legislation, it might pay to become an expatriot.
Not so good when using or owning bitcoin sovereignly becomes the highly illegal activity, in most places in the world. It wouldn't surprise me if it happens soon after the ETF:s are approved.