I never understood why people thought it was a good idea to invest in crypto currency...
If you have the money to burn on a GPU meant only to mine crypto currency, then that money is much better spent invested in the S&P 500 or some index fund that's very unlikely to completely tank. Not saying that Ethereum will tank immediately as a result from this event, but it's only a matter of time before it goes the way of Bitcoin which will never get back to what it was (no matter how much faith the loud minority has in it).
Unless you're laundering money or trying to buy illegal items, there's no reason to invest in something so fragile. In America, the FDIC insures up to $250,000 so if your bank gets hacked, you're still guaranteed your money, up to that point. Since there are little to no regulations on crypto currency you can't consider any of it secure. Also, you can buy basically anything (legally) with cash or a debit card.
So unless you're a criminal in some way, I don't see ANY advantage in investing in crypto currency.
Don't confuse investing in cryptocurrency with investing in mining hardware. You can invest in cryptocurrencies themselves without having to mine them. Investing in mining is generally pretty stupid, because most coins have difficulty bombs enabled such that mining becomes harder and harder and less and less profitable in order to maintain a finite supply. However, you can just invest in a cryptocurrency the same way you invest in stocks.
You're right that cryptocurrencies can tank, but they can also shoot up in ways that make more profits than any kind of index stock fund. Of course it's a risky venture, but it's mostly just people who have extra money to set aside for a risky investment. Are they "smart" investments? You could argue either way. There are tons of people who have made huge amounts of money off simply researching tons and finding out which coin would shoot up next, which in this case was Ethereum.
Also, I don't understand what you're saying about Bitcoin never getting back to where it was. It reached its all time high of $3,000 about a month ago, and it's at $2,300 right now, mostly due to concern over some protocol changes at the end of this month. It's not really that far from where it was, and tons of major market analysts are betting on it continuing to rise. In 2014, Bitcoin reached its then all-time high of about $1,000, but then continued to drop slowly for the next two years as some people lost interest. Many people said it would never again reach that high, but this year it almost tripled that value.
These are long-term investments, and we're talking years. The blockchain behind these currencies is an incredible technology, and really, when you're investing in cryptocurency you're investing in that. A lot of people legitimately believe that in countries without a strong fiat currency, coins like Bitcoin and other altcoins have a legitimate chance at seeing widespread adoption. We're not there yet-- so you're right, there really is no reason to invest for personal use right now. But for future gains, many people would say that these are some of the most solid investments around.
EDIT: Also, about the security bit, there are plenty of ways you can keep your cryptocurrency safe. There are hardware storage options such as flash drives, special hardware wallets, and even sets of private keys on paper that you can use to access your wallet. These can all be kept in cold storage and safe deposit boxes.
