From bicycle, by shortening, and possibly alteration. Attested from 1882.
One explanation for the pronunciation is that bicycle is parsed to bi(cy)c(le). An alternative explanation is that bicycle is shortened to bic(ycle), and the terminal [s] is converted to a [k] because there is an underlying underspecified [k]/[s] sound, which is softened to [s] in bicycle but retained as [k] in bike; compare the letter ‘c’ (used for [k]/[s]).
From Middle English bike, byke. Of Unknown origin. Perhaps a back-formation of Middle English *bykere, from Old English bēocere; or from Old English *bȳc a byform of Old English būc. Compare also Old Norse bý.
Modern English dictionary
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