What could cause bloody nipple discharge?

Papilloma: An polyp in the breast duct(papilloma) is the most common cause of bloody discharge but breast cancer should be eliminated as the cause. A mammogram and ultrasound can show the lesion. A core needle biopsy can make the diagnosis. In some cases as special mammogram with dye (ductogram or galactogram) may need to be performed.

Multiple things: Breast cancer, intraductal papilloma, abscess can all cause nipple bleeding. See your doctor ASAP to have this evaluated.