[spoiler]The infection of the blood seems to have come from the blood healing arts it's self and as it became more common in the city it quickly spread and soon the church was forced to begin the hunts under Ludwig to quell any beasts.
But the cause can be traced back to the people who likely made the blood healing arts to begin with, I believe them to be Pthumerians who carved out the dungeons found below Byrgenwerth and where the knowledge that led to it's spread and the creation of Healing Church when Luarance left to share(?) the knowledge beyond Byrgenwerth's gates.
"The old labyrinth was carved out by the Pthumerians. superhuman beings that are said to have unlocked the wisdom of the eldritch truth."
We mainly encounter them in the chalice dungeons but several seem to have joined the church or rather the Old Ones controlling it as they patrol the Church Ward up until the Grand Cathedral. Blood Healing must have come from them, and as it was likely invented via "Eldritch wisdom" the old ones could likely infect the people and attempt to find their desired surrogate children from among the infected.
Also theres is signs they held blood in the same importance as the later Pthumeru areas have alot of pits filled with corpses and rivers of blood, perhaps collecting it for rituals of their own? Sound similar to some of the areas up above?
At least thats how I see things. Once I finish the Chalice dungeons I might know for sure.
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