You can store an encrypted history on the server.

But searching is hard to do with encrypted text.

You could, but then a new user can't read the history. But there might be ways around that, ie. automatic resending of the history by a participant.

You can search on the client with the decrypted text.

It could be. The simple approach is generating a key when the server/channel starts and sharing that between clients. Of course there are downsides to this, but you can make improvements to this system to get aspects that you want (such as rotating the key when someone leaves and giving all keys to new members).