Historically cryptsetup and LUKS only supported good old passwords; however recent systemd versions extend cryptsetup with additional key types such as FIDO tokens and TPM devices.
I like the idea of encrypting the rootfs with a TPM2 key; it allows booting without ugly LUKS password prompts but still it keeps data encrypted at rest, and when combined with secure boot also still protects the running system against unauthorized access.
Secure boot will prevent others from placing custom kernels on the unencrypted EFI system partition and booting these, or changing the kernel cmdline, in order to obtain root access to the unlocked rootfs. LUKS encryption with a TPM-based key bound to secure boot state protects the data if someone removes the hard disk and attempts to access it offline, or tries to disable secure boot in order to boot a custom kernel.
Installing Arch on a LUKS-encrypted dsik traditionally required a few careful configuration steps to configure the proper root device for booting; if any of these steps was omitted or done wrongly the system would fail to boot. With systemd and dracut however a LUKS-encrypted Arch system can boot safely and reliably without any configuration:
Dracut builds a unified EFI kernel image including microcode and a generic initrd with systemd and cryptsetup.
systemd-boot automatically discovers unified kernel images installed by dracut and automatically adds them to the boot menu without explicit boot loader configuration.
At boot systemd automatically discovers and mounts the root file system following its DISCOVERABLE PARTITIONS specification.
The following commands demonstrate a fresh Arch installation from the Arch installation media into a libvirt VM. Installing to a pristine physical machine or a different virtual machine provider should require only minimal changes; adapting an existing system may be more difficult and require more work.