I dont think comparing to an index really works as things stand. Even if one has to compare, one should calculate beta of an altcoin wrt an index and then see if one made any alpha. Alts being high beta will give you higher returns in a bull market and one will outperform an index of top 20 even if one underperformed that low market cap alt.

Comparing a portfolio to an index is still sensible. One can play with the weights to get a trur sense of one's ability.