RAW, there doesn't appear to be anything against it. The material component of Fabricate is whatever base material out of which you're making the new item. Since Blood Money replaces that with blood and magic, it appears this would work.
RAW: it's a material component so it can be substituted by blood money.
My ruling: No! the spell is transmutation school and shapes the material component into a finished item, rather than consume it as usual and conjure(not transmute) a finished item.
Besides: the description of what the spell does says the finished product is of the same quality as the material used, the material component from blood money has no defined level of quality, so if a player tried it, I might give his character a lump of bloody goo. So even for those who cling to RAW there is a way out - the word is 'quality'.
Even though that is sort of a Rules Not Written arguement.
By rules: Yes
By Gm's: NO GM don't likes the idea of people being able to create free wealth like that. It take away there power to give or withhold loot.
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Actually... not quite.
The material component of Fabricate is also its target. Since the substitute material component from Blood Money does not yet exist, the Fabricate spell cannot be cast in the first place.
But if you already have a lump of adamantine, you can use Blood Money to create that sword and keep the original metal.