For example if the URL is www.website.com/123, then I want to update my custom field with something W#123 which will be an hyperlink to the above mentioned URL.I want to do this via jira APIs.
I Understand you would like to create hyperlink into custom field. you need to use Multi-line text field and using jira cloud API you can achieve this. payload format to call API is like this:
curl --request PUT \--url 'www.website.com/123' \--user 'Email:API Token' \--header 'Accept: application/json' \--header 'Content-Type: application/json' \--data '{"fields": {"customfield_xxxxx": {"version": 1,"type": "doc","content": [{"type": "paragraph","content": [{"type": "text","text": " W#123","marks": [{"type": "link","attrs": {"href": "www.website.com/123"}}]}]}]}}}'
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