I have always crated mine because I sleep better knowing they are safe and that they cannot get into anything. They do cry at first, but they get used to it. I put toys in the crate, and I would also give treats while they were in the crate. I also cover my crates. It seems they sleep better if the crate is completely covered.
Since you have a small puppy, I would use an x pen with puppy pads so they can leave the crate and go to the bathroom. Once they are old enough to hold their pee all night, then I would put them in the crate. A little puppy cannot hold it all night and you will teach them to go to the bathroom in their crate, which you do not want to do.
I would put them in a pen, though. This way they cannot get into something or tear something up during the night. It will also help with potty training.
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