From Middle English ye, ȝe, from Old English ġē, the nominative case of the second-person plural personal pronoun, from Proto-West Germanic *jiʀ, from Proto-Germanic *jīz, a North-West variant of Proto-Germanic *jūz, from Proto-Indo-European *yūs, *yū́, plural of *túh₂. Cognate with Scots ye, Saterland Frisian jie, Dutch gij, jij, je, Low German ji, jie, German ihr, Danish and Swedish I, Icelandic ér. See also you.
From Middle English þe. Early presstypographies lacked the letter þ, for which the letter y was substituted due to their resemblance in blackletter hand (etymological y was for a while distinguished by a dot, ẏ). Short form yͤ continued long after the digraph th had replaced þ elsewhere.