To make life easier, let the width of the paper be $1$; we can scale up to $8.5$ at the end. Look at the "missing" triangle at the bottom left. Let the angle on the right of that triangle, the angle of the fold, be $\theta$.
Then what you have called $x$ is $y\sin\theta$.
Now look at the little triangle at top left. Its bottom angle, by angle-chasing, is $2\theta$. Its hypotenuse is $y\sin\theta$, and the "adjacent" side is $1-y\sin\theta$. So we obtain
$$\frac{1-y\sin\theta}{y\sin\theta}=\cos 2\theta.$$
Solve for $y$. We get
$$y=\frac{1}{\sin\theta(\cos 2\theta +1)}.$$
The identity $\cos 2\theta=2\cos^2\theta -1$ improves this to
$$y=\frac{1}{2\sin\theta\cos^2\theta}$$
We want to minimize $y$. So we want to maximize $\sin\theta\cos^2\theta$, that is, $2\sin\theta(1-\sin^2\theta)$. So we are in essense minimizing $2t-2t^3$.
Differentiate as usual. We find that for smallest $y$, we need $\sin\theta=\frac{1}{\sqrt{3}}$. The corresponding $y$ is $\frac{3\sqrt{3}}{4}$, which (almost) gives $\frac{3}{4}$ for your $x$, except that we need to scale up by the factor $8.5$. The prettiness of the number $\frac{3}{4}$ undoubtedly means that the calculus way, though simple enough, is not optimal.