Chrome downloads bar is probably the worst 'liked' feature about Google Chrome according to discussions in Google Products Forum. And rightly so. Like so many others, I too hate it. The dislike gets intensified since Chrome provides no easy option to hide or disable the bar. After a long search, I finally discovered one option to achieve this: Go to 'chrome://flags/' and disable the 'New Downloads UI'. A relaunch is required and wohoo the download bar hides nicely.
Now, the sad part. The page at 'chrome://flags/' mentions that the experiments may bite and they are serious about it! :(
If you try to download a file that is an installer i.e. a dmg/exe file or even part of an extension, chrome asks for a confirmation. With the downloads bar now hidden, the option to ask a confirmation remains hidden and thus you're hanging in the balance. The download remains stuck and at some point you must revert back to enable the 'New Downloads UI' to carry on with life :( Ahh.. Google.. Please give us the option!