You don't have to have the power and influence of JP Morgan to launder bitcoins. I'm not an expert but it seems much more easy and untraceable to launder bitcoin vs. dollars or other currencies. I may be mistaken though.
If everyone is doing it then it becomes much easier to run a mixing service, and to the extent that a mixing service polices its own membership, the more unsavory characters could be weeded out...
But as for traceability, if you're not mixing your coins with other peoples' coins, there's not much you can do at the point of sale to obfuscate the origin of those coins.
Everything is absolutely traceable. You can identify every transaction that a bitcoin (or fragment) was involved in since it was minted. With a "taint analyzer" (not kidding, this is what it's called) you can see what percent of the bitcoins stored at an address were ever stored at another given address, to see how many of these coins are "tainted" by those coins' history.
That being said, simple mixing services likely do still exist, and if you are willing to pay a small trade fee at most any online exchange, you can (probably) be rid of your existing bitcoins and quickly having new bitcoins with the stroke of a keyboard. If those exchanges are following KYC and AML, you still haven't broken the trail.
