This pattern can be done with any weight of yarn - baby through sport. It is a great way to use up odds and ends from your stash. Acrylic works best, but cotton can also be used. Cotton hats tend not to be as stretchy though. I don’t recommend wool since baby items need to be easily washable.

Make sure to select a hook that is appropriate for the yarn you select.

Also, as a guideline, a preemie sized hat should fit an orange, and a normal newborn hat should fit a grapefruit. Of course with so many people having 9 and 10 pound babies it can also be helpful to make hats a bit bigger than grapefruit sized too.

For baby gifts I often make a nice blanket. Then add a set of 3 hats, with each hat being a bit bigger than the last, in the yarn that co-ordinates with the blanket. You can see examples of this in my projects.