That is the title of this NBER working paper by three early-career academic researchers: Fernando E. Alvarez, David Argente, and Diana Van Patten. (And here is a summary of their research report.) Their paper is excellent, but I want to make three observations in reply:
- El Salvador (population: 6.3 million) did not make bitcoin legal tender until September of 2021. Given this recency and small sample size, the findings by Alvarez, Argente, and Van Patten in their July 2022 report are premature at best.
- Nevertheless, although I commend the government of El Salvador for giving bitcoin a try (experiments > armchairs), the fact that no other country in the world has yet to do so makes me update my anti-bitcoin Bayesian priors even further downward.
- What about the larger question: is bitcoin a bubble? Check out the bitcoin-themed rap battle below:
prior probability 
Considering El Salvador’s history of inflation, I can see why they made the switch. It falls in line with Latin America’s tendency towards policy of dollarization.
If we can’t stabilize our currency, may be we should peg it to a money that has more resistance to inflation.