That's a good question. The usual

Croire à qqc -- to believe something
croire en qqc -- to believe in something, trust in something, have faith in something

(Note that croire can also take a COD without any preposition)

There's a difference in certitude or conviction: croire à is less certain, with less emotional emphasis than croire en.

In the sentence you ask about, y may not stand for en toi, it could also stand by itself and on its own, referring to the general idea of "believing in you".

Thanks, Chris. A couple clarifying questions--what does COD stand for?

And if y does not stand for anything, then what is its purpose In the sentence?

COD = complement objet direct = direct object of the verb. In the case of croire, this would be: je crois Pierre riche -- I hold Pierre for rich (I believe he is rich).

 J'y crois is idiomatic and means "I believe it".

Stephanie - not sure about the use of ‘y’ here - but agree it logically replaces ‘en toi’. As it is in a song, perhaps this is not 100% grammatically correct ? Every site I have found notes only places, things or “ideas” but not ‘people’ can be replaced by ‘y’.

However ‘y’ is not restricted to replacing places introduced by à, it can replace a place starting with other “prepositions of place” as well.

Je vais en France -J’y vais, for instance.

https://www.leaflanguages.org/french-grammar-adverbial-pronoun-y/

https://www.frenchtoday.com/blog/french-grammar/how-to-use-the-pronoun-y-in-french/